With the costs of foreign travel mounting, breaks abroad can easily break the budget. One of the easiest places to make savings is on the cost of travel money.
Here are a few useful tips for getting the best deals.
Plan ahead and check rates
Don’t leave buying travel money to the last minute. Although many airports have agents stocking a number of different currencies, you won’t necessarily get the best rates.
If you’re in a rush, why not buy foreign currency online? Many money providers will give you the option of next day delivery and it will often save you both time and money.
Remember that commission-free deals won’t always give you the best rates. It’s tempting to purchase travel money from providers offering 0% commission, but you could end up actually paying more in the long run.
Do your research and shop around. Work out what sort of rates you’ll be paying and how much commission is involved. You might actually be better off paying a small commission fee but opting for a better rate.
Some dealers also demand a minimum charge, which can make it difficult to exchange small amounts of money. On the other hand, flat fees may offer a good deal when exchanging large amounts.
It’s worth checking your own bank or building society too, as they may give preferential rates to customers.
Play safe with travellers’ cheques
Although not as popular as they once were, travellers’ cheques are still a secure way to transport money abroad. Make a note of the cheque number and you will be safeguarded against any loss.
However, they can be expensive. Not only will you be charged a commission when purchasing cheques in sterling, but you’ll also need to pay a rate when exchanging them into local currency.
The best idea is to shop around for competitive rates and consider purchasing cheques in larger amounts – you may end up paying the same fees for £10 or £100.
Bank on credit cards
If used properly, credit cards can be an economical and safe way to make purchases abroad.
Some cards are aimed specifically at travellers, offering frequent flyer points and other loyalty rewards, and may also offer insurance on purchases over a certain amount.
Choose a card with the lowest annual fees and make sure you pay it off each month to avoid paying interest.
If you’re drawing out money from a cash machine abroad with a credit card, be aware that interest charges will be applied immediately.
Never accept the option to pay in sterling on your card when abroad as you may be liable for a costly dynamic currency conversion. Instead, choose to pay in local currency.
Take the prepaid route
Prepaid cards are becoming increasingly popular as they allow you to keep a tighter control on your holiday budget.
You can also apply for a prepaid travel card without having to worry about your credit history.
Many cards can be used all over the world and some even offer 0% foreign exchange fees. Providers can also cancel and replace cards if they are reported lost or stolen.
However, be aware that some fees may apply – such as ATM or cash machine withdrawal fees and top-up charges.
When travelling, it’s also important to look for a card which allows you to make top-ups over the internet.
If you can’t decide what to do, it might be best to mix and match a few different options.
Whatever you do make sure you do some research and compare rates beforehand.