Heading off on holiday? Don’t get caught out by poor exchange rates and high commission charges. Here’s a guide to getting cheap travel money.
It’s always a good idea to take some cold, hard cash with you when you go away on holiday. Not all shops and restaurants take plastic, and it’s often essential for local transport (not to mention emergencies).
Unfortunately, only 38% of Brits buy their foreign currency online. A lot of us, it seems, are happy to pay through the nose by buying our currency from high street banks and expensive airport bureaus – which can charge as much as 10% more!
Don’t get ripped off!
How To Get Cheap Travel Money
1. Don’t get your cash from the airport, tour operator or bank
Don’t exchange your money at the airport if you can possibly avoid it. Rates are always poor as they know you can’t go elsewhere and get a better rate. You could easily find yourself paying £50 or more extra at the airport bureau de change than if you’d got your money in advance elsewhere.
Likewise, it’s usually best to avoid your foreign currency through your tour operator as they rarely offer good rates.
Finally, don’t fall into the trap of automatically heading to your bank – again, their rates are often average at best.
2. Get the best deal on the high street…
Different bureau de changes use different charging structures, so it’s worth shopping around for cheap travel money – as prices can vary greatly.
Bureau de changes make their money in two ways: commission fees and exchange rates.
Commission fees: This is where the bureau de change takes some of your money as a fee when converting your cash to foreign currency.
Exchange rates: This is where the bureau de change offers you a worse exchange rate than the bureau itself actually receives – and they pocket the difference for themselves. This is how bureau de changes that advertise themselves as ‘commission free’ or ‘0% commission’ make their money.
Watch out for commission fees and the exchange rate (rates are usually better online)
Remember! Just because it’s ‘commission free’ doesn’t always mean it’s a good deal – their exchange rate might be dreadful. Check the rate and shop around.
3. …or buy online for the best travel money rates
Rather than trekking up and down the high street, you can compare (and buy) currency online. Not only do online providers often boast better exchange rates – they can deliver cheap travel money straight to your door.
The downside? Unless you order £500-plus of foreign currency, most online providers charge you for delivering the money to you (typically around £5).
However, you can often order your currency online and pick it up for free either in branch or the airport.
Thomson, Moneycorp, Travelex and the Post Office all offer ‘commission-free buy back’ – in other words, if you have some foreign currency left when you get back to the UK, they won’t charge you for changing it back to sterling.
4. When buying foreign currency, DON’T pay by credit card
Most credit cards (including Visa, Mastercard and American Express) charge foreign currency conversion fees – which can be as high as 3%. If your are a traveler from a different country and are trying to visit the US, then make sure you get a Visa from ESTA.
So when buying your foreign currency, use your debit card (or cash) to pay. That way, you won’t get stung by this fee.
5. Beware of keeping your cash in a bureau de change for long
It’s important to remember that, unlike cash in a bank, your money ISN’T protected while it’s being held by a bureau de change. So if the organisation goes bust while it’s holding your holiday cash, you may struggle to get it back.
Other travel tips
Got your cheap travel money sorted? Great! Now make sure you:
- Find out how to get the cheapest holiday flights to your destination – every time
- See these 20 ways to have a cheap family holiday
- Check out these US and European theme park deals – you can get BIG discounts on everything from Disneyland to Port Aventura.