The price of the Passover holiday does not end with the flight, hotel and expenses. The foreign exchange fees can make the vacation hundreds of shekels more expensive.
Israelis have already discovered that pre-booking the Passover holidays abroad can save them thousands of shekels, therefore, they pre-book the flights, hotels and attractions in the selected destinations ahead of time. The first step is usually purchasing plane tickets. This is exactly the stage where the currency exchange costs begin to reflect and make the vacation more expensive, even before you reach your destination and purchase foreign currency or charge your credit card.
In 2022, the income of banks from foreign exchange fees on credit cards reached about half a billion shekels. In that year, there were about 8.4 million departures of Israelis from the country. In a rough calculation, that means - for each trip, a private person will pay about 60 shekels just for the fees for converting the shekels to the dollar, Euro, or another foreign currency.
When referring to traveling as a family, the costs can exceed 300 shekels and more, depending on the cost of the vacation. A test performed on a long or expensive vacation showed that the cost will also reach the amount higher than 1,000 shekels just for the bank's commission.
How much more expensive can the vacation be?
For the purpose of illustration: Walla chose 3 Passover vacations with El Al flights and 4 or 5 star hotels. This is based on the foreign exchange commission data according to calculations of the highest foreign exchange commission in the market (3%).
A vacation package to Greece for a family of four: El Al flights to Athens and a five-star hotel between April 6-12 will cost approximately 13,982. The amount the family will have to pay in addition to the barrage fees can reach NIS 420.
Another vacation package to the Black Forest for a family of four: El Al flights to Zurich and a five-star hotel between April 7-13 will cost about 21,630. The amount that the family will have to pay in addition to the foreign exchange fees can reach 650 shekels.
The Thailand package for a family of four: Flights with El Al to Bangkok and a five-star hotel between the dates of April 6-12 will cost approximately 46,100. The amount the family will have to pay in addition to the foreign exchange fees can reach NIS 1,383.
There are ways to reduce the conversion fee
The public is not aware of the amount of the fees they pay and some are not even aware of their existence, since they are not charged separately but simply integrally with the purchase as a more expensive exchange rate.
Despite this, there are several ways to lower or avoid paying these fees, among other things through various consumer clubs or credit cards that promise customers lower fees.
The digital bank, ONE ZERO, for example, offers an "all-inclusive" plan for a monthly payment of NIS 49 that includes all fees including foreign exchange. The subscription fees allow customers to use the credit card with a full exemption from the conversion fee. Eric Chikotai, VP of Banking and Operations of ONE ZERO, said, "In everything related to the bank, Israelis are used to paying attention to the current account fees, but they miss a very expensive fee that is hidden in the credit card."
He further explained, "After two difficult years of a global pandemic, Israelis returned to flying and it is most convenient to pay for the flight, hotel and shopping with a card that is accepted in most countries in the world. For a Passover vacation in Italy that costs NIS 30,000, a family will pay about NIS 900 just in currency exchange fees, An amount that makes the final cost of the vacation more expensive, therefore, it is important to check with the bank what the commission will be, to bargain and check alternatives."
Which card will you choose to use abroad?
The Postal Bank: At the Postal Bank, there is no conversion fee for foreign exchange, only a margin between the representative and the purchase price (margins exist in every bank or exchange, but banks also charge a conversion fee).A prepaid card from the Postal Bank can be a solution. There is a cost associated with purchasing dollars that are loaded onto the card, similar to the purchase of cash (foreign exchange purchase rate, which includes a margin from the representative rate), but there will be no conversion fee when used abroad.
Amit Sagi VP Data Digital and Marketing at Isracard explained that "in today's competitive world, when a consumer has several cards and clubs in his wallet and the companies are competing for the hearts of consumers which card they will choose to use abroad, our goal is to produce benefits that meet a real need at the relevant time. Therefore, following a significant increase in the booking of flights and vacations abroad during this period, we chose to go with the benefit of 0 percent currency conversion fee, which benefits the customers and results in significant savings in their vacation expenses abroad."