Updated for Summer 2012
Since we first published our ‘Top Tips’ a few things have changed and we have now updated all the tips below to reflect what we think will give the best experience.
It can be difficult to find useful, impartial advice online, especially with so many companies trying to sell you their latest and greatest products. Although this minefield of information can be confusing, the basic principles of getting the best exchange rates haven’t changed – and can save you a lot of money if you are planning to buy currency soon.
Here at Compare Holiday Money, we have compiled a list of the top 8 tips to save you money when you travel abroad:
1. Order your currency online
Most of the best exchange rates can only be obtained by ordering online. There are various reasons for this, but generally speaking it is because transactions carried out online save time, paperwork, and man-power – and these reduced overheads are reflected in the better exchange rates.
If you would rather pick your currency up in person, some currency suppliers like the Post Office will allow you to order your currency online and pick it up at your local branch. Be wary of buying your currency over-the-counter though as most branches will offer you a lower rate if you walk in off the street.
The best value is actually given, for most people, by prepaid currency cards. I do not suggest you take all your currency on a card, the chances of you finding a taxi at the airport that will take a card at 2am when your easyjet flight lands is slim. You will still find the best rates for cash currency online and taking a about half your travel money as cash means that even should you not be able find an ATM (cash machine) you still have money you can use there and then. The other half of your holiday money you put on a card and get the better rate.
2. Never buy currency at the airport
If you haven’t already bought your currency by the time you arrive at the airport, you will pay a premium price for it. Buying currency at an airport will cost you roughly £50 more per £1000 than buying it in advance.
3. Take a range of payment methods
Cash is king, but carrying large amounts can be unsafe. Consider a combination of payment methods – especially if you are travelling for a long time. Traveller’s Cheques and Currency Cards are popular additions to cash and are much safer.
We have had a lot of reports from people finding hard to either cash Travelers Cheques and also to buy them at a decent exchange rate. It appears that the pre paid currency card is replacing the Traveler’s Cheque as the main alternative form of currency.
4. Keep the plastic in your wallet
Try to avoid using your bank-issued Credit or Debit card abroad as you can be charged heavily for doing so. Some banks charge up to £3.50 every time you use your card in another country, and will add interest on top of that so they should only be used as a last resort.
Prepaid cards may be free to use or if they do charge the fees are typically only £1.50 per withdrawal. The only time you should use your normal card is when asked for a deposit such as for car hire. As the card should never be actually charged this is the best time to use your regular credit card.
5. Pay in the local currency
If you are asked whether you would like to pay in Pounds Sterling or the local currency (e.g. Euros), always choose the local currency. Merchants use a system called Dynamic Currency Conversion or Cardholder Preferred Currency which allows them to set the exchange rate if you opt to pay in Pounds – and it is never in your favour!
This tip hasn’t changed. Never pay in Pounds Sterling.
6. Ask for small and medium denominations
Most currency suppliers will try to provide you with an even spread of notes, but if you are able to specify which denominations you would like – opt for small and medium notes. While this will have no impact on the exchange rate you receive, smaller notes will come in handy when it comes to tips, food and taxis, and some places will even refuse very large denomination notes for security reasons.
Some currency suppliers will charge a fee for requesting specific denominations, so be sure to check this out first.
More and more providers are offering collection as an option. If you can do this then when you are there at the counter your can ask for exactly the mix of notes that you would like.
Many providers will try and round your order to the next smallest note that they carry, so if you could not order anything less than €10 then chances are they will not be able to give you any smaller notes when your order is delivered.
7. Take the right amount of cash
Try to plan a rough budget for your holiday by allocating yourself a certain amount of currency for each day and only taking what you need. Not only will this be safer, but you will be less likely to return home with leftover currency that you have no use for. You can always take a currency card as a backup in case you need more cash, but make sure there are ATM’s available at your destination.
Most people apparently run short of money after just five days of a seven day break. One advantage of the prepaid card is that you can add more currency to them either through internet or telephone banking and still get really competitive rates.
8. Compare exchange rates
Before you rush off to the high street to hand over your hard-earned cash, it’s worth comparing the exchange rates from the top suppliers to see who is offering the best deals.
Check out our free exchange rate comparisons for a definitive list of today’s exchange rates and get the best deal from the comfort of your own home.
We now praovide charts that very easily show if the rate has been improving or worsening over the last seven, fourteen and thirty days. Whilst last week may be n indication of what will happen next week these at least give you a really easy visual guide as to what is happening to the currency you are interested in. We provide these charts for every currency we currently compare.