The majority of us can only afford, or have the time to go away once a year. This makes it even more important to get the best price available when you’re changing your money into foreign currency.
Getting the best deal means you often spend less on charges and commission and more on holiday treats. Whether you decide to take a prepaid currency card, cash, credit card or traveller’s cheques, here’s how to bag the best deal for your hard earned money.
Keep an eye on the exchange rate
Get into the habit of looking at exchange rates as they can fluctuate daily. This will give you a greater idea of what a good value exchange rate is.
An alternative way to carrying money is to purchase traveller’s cheques. Not only are they secured, but if you make a note of the cheque numbers you’re guaranteed a full refund if they’re stolen or lost.
The exchange rates for travellers’ cheques are often poor and come with high fees, especially when cashing the cheques abroad as you are likely to be charged an additional fee.The fee’s are not a sliding scale either – it will cost you the same to cash £100 as it will to cash £10.
Prepaid cards are very easy to use, you can simply top them up with a fixed amount to last the duration of your holiday. These aren’t linked to any of your debit or credit cards, so if it’s lost or stolen nothing else is at risk, making it one of the safest ways to carry money on holiday.
Most providers do not charge an exchange fee while others charge an initial set-up fee so it’s worth shopping around to find the best prepaid cards. Also, some cards will allow you to top up using your phone or internet while others will only allow you to top up face-to-face.
The biggest benefit to using these cards is that they can be used in the same way you use debit and credit cards in the UK. This way you can top them up via the internet or over the phone should your holiday funds run low while you’re away.
Ordering currency online
Ordering currency online is a great option as you can pick your money up before you board and it often works out cheaper than it would if you exchanged it at the bureau de change at the airport. It is also important that you’re aware that ‘commission free’ doesn’t always mean you’re getting the best deal as they are often fees added onto the rate. And watch out for handling fees as they could cost you £3 or more.
Bank or building society rates
Some banks and building societies provide special rates for existing customers, so next time you’re jetting off go into your bank and check to see if they charge for using your debit card to pay for foreign currency. If they do, it may be better to withdraw the cash and pay for your currency with cash.
Debit and credit cards
It is generally best to avoid using debit or credit cards to withdraw cash abroad as many charge an exchange rate of up to 3%. Some credit cards offer 0% on purchases for up to 12 months, but you should check with your credit card provider to make sure there are no fees or restrictions on purchases overseas.
You may also be charged an additional fee of around £1 per purchase made on holiday, or a £2 fee each time you withdraw money from an ATM. The exchange rate from your bank is often high – make sure you shop around for currency while you’re still in the UK.