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Foreign currency, how to get the best deals
In today’s turbulent and constantly fluctuating money markets, it is even more crucial than ever to shop around for a decent foreign exchange rate.
Top Tips for Buying Foreign Currency
Every day at the moment we are hearing stories of the pound rising against the euro or falling against the dollar, or vice versa - so how do we know we are getting a good rate when we exchange our pounds into holiday cash.
The key is to make sure you don’t plump for the lowest headline rate but shop around and look at the cost of the total package.
Online or on the high street?
Wherever you’re going on your holiday and whatever currency you may need, by comparing the foreign exchange rates and shopping around you can make holiday money go even further.
Competition on the internet, the high street and at the airport means that most bureaux are commission-free now. But other charges have crept in. The best way to start is by being sure you get the very best “all-in” rate when you get your foreign cash.
Do a thorough search to compare exchange rates on the internet and seek out the best deals – there is a huge amount of competition out there for your holiday cash. But bear in mind that handling fees could be charged if you pay by a debit/credit card and postage (often £5) could also be added on top. So if you’re changing a relatively small amount, the charges could cancel out any savings on a good exchange rate.
On the high street, exchange rates may be higher – a company’s online rates are usually lower than their high street ones – but there are no postage charges and you should be able to avoid handling charges.
You may have to order the currency for next day pick-up, so make sure you’ve got a day or two in hand.
Use your connections
Firstly don’t forget to check out any special deals you may already be entitled to through your bank.
Many banks waive handling charges for their current account customers, particularly if they pay with the bank’s own debit or credit card. But, that said banks rarely offer a competitive exchange rate, too, whether that’s online or in a branch.
Also, a dedicated foreign exchange outlet of a bank or travel agent often have great value deals so keep an eye out for these if you are a Londoner.
Avoid the big rip-offs
A sure-fire way to get stung is to buy your foreign cash at the airport. Rates are considerably higher the closer you are to the runway and the supersize Toblerones.
However, it could be worth ordering your currency online from one of the main bureaux like Travelex, which often has competitive rates on the web, and then pick it up at the airport.
Travelex also offers a price promise guarantee and anecdotal evidence suggests they stick to their word. So if you find a better rate on the same day you’ve bought currency from them online — let them know. A cheque could be waiting for you when you get home.
Another trap to avoid is exchanging money once you’re at your destination — rates in airports and resorts will be sky high and you could well be charged handling, too. So plan how much you think you’ll need in advance to avoid wasting your holiday standing in a bank queue. And every time you top up your wallet you’ll probably incur a fresh set of charges.
Whatever you do, try to avoid taking cash out of an ATM when abroad — some banks levy high transaction charges. If you use a credit card you’ll also be charged a cash advance fee.
Recommendations
- Use the internet to find the best exchange rate
- Check out hidden costs including commission, handling and postage to make sure you get the best total package
- And never exchange money at an airport or at the resort – the rates are bound to be less competitive.
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