According to research carried out earlier this year by EasyFX, It is estimated that nearly in one in four British people holidaying abroad lose on average £100 when it comes to foreign exchange rate deals. This is for a number of reasons, such as not spending enough time looking for the best deal, or simply not knowing what they should be looking for.
Luckily, All The Lenders has a variety of tips to help you get the most cost-efficient exchange rates, whether this be before going on holiday, or whilst you are abroad. Whilst we specialise in payday loans, in this guide, we explain how you can get the best value for your cash.
Remember the fees you will pay
It is important that you are fully aware of all the potential fees you may be charged for transactions whilst away. For example:
- WIth any non-sterling purchases, you will have to pay a fee of anywhere between 0-1.25 percent each time you buy something abroad using a card
- There is also the non-sterling transaction fee you will be liable to pay with your card. For British holidaymakers, this will be around 2.75 to 2.99 per cent for each transaction you make with your card
- You also need to keep in mind ATM cash withdrawal fees whilst abroad. Depending on the ATM in question this could cost you in the region of £1.50 to £2 each time.
- Remember that that these aren’t the only fees to consider: foreign banks can also charge you for cash conversion, as well as bureau de changes.
Avoid ‘paying in sterling’
If you are using your credit or debit card to make purchases whilst away, it is commonplace for you to be asked as to whether you want to pay in sterling, or paying in the local currency. Experts recommend to always choose the latter option. Why? It comes down to what is known as the Dynamic Currency Conversion, as choosing to pay in sterling means that the vendor is able to create their own exchange rates which usually tends to be much more expensive. As a result, always decide to pay in the local currency, as it is generally the case that your own bank’s exchange rate is less.
Look at getting a prepaid currency card
When going on our holidays, the majority of us choose to exchange currency by either using our credit or debit card abroad, or making a trip to a bureau de change. Nevertheless, these do not always provide you with best value for money, particularly when it comes to withdrawing cash abroad where you can pay high transaction fees, as well as running the risk of carrying large amounts of money on you.
That is why it is worth looking at investing in a prepaid currency card instead. With these types of cards, there is usually no hidden charges involved and they are free to purchase. Prior to going abroad, you top these cards up using your credit or debit card, buy the local currency and then use this card whenever you need to abroad, helping you to cut out expensive foreign bank fees.
Use Global Alliance ATMS
Keep an eye out for Global Alliance ATMs whilst you are abroad if you want to cut down costs. The Global Alliance is made up of a number of leading banks worldwide who allow their customers to use these ATMs anywhere in the world without fees. Currently, the main UK bank who participates in this scheme is Barclay’s, meaning that you can use this ATMs abroad without having to worry about additional charges.
Avoid exchanging money at the airport
It is very often the case that UK holiday makers will decide to purchase their local currency at a bureau de change at an airport before going abroad. However, if it all possible you should try to avoid exchanging money in this way. As it tends to be a last minute option, the fees tend to be far higher than you would receive elsewhere, and the exchange rate tends to be considerably poorer too. If you must exchange money at an airport, it is thoroughly recommended that you order the cash online beforehand, as you will receive a significantly better deal by doing so.
Look one month before your holiday
You might be wondering as to when exactly is the best time to start research foreign exchange rates and purchasing travel money in order to get a great deal. As a rule of thumb, experts recommend that it is usually worth looking around one month (if not longer) before you intend to go on holiday, and then decide to purchase your cash when the pound is strongest and the rate is increasing in order to get the best value for money.
High street vs online
Did you know that it is often the case that specialist foreign exchange providers tend to offer far better deals online than on the high street? This is why it is well worth deciding to purchase online and then have it delivered in the post, or decide to pick it up in store.
A useful tool to save money if taking out currency abroad is Revolut – there is a real-time exchange rate so that you avoid any fees or changes in currency. Perfect for seasoned travellers or businessmen who find they are constantly abroad.
Be wary of traveller’s cheques
Traveller’s cheques have certain benefits, for example, they offer security in the sense that if you have money stolen, you will be able to retrieve this from your bank, but unfortunately, they also tend to be one of the most expensive holiday money options. This is because however much you end up converting before going abroad, you will be paying that same flat fee. See post office for more information.
Research where to buy your holiday money
Spend time in advance looking as to where to buy your travel money, in much the same way you would shop around for the best deals regarding accommodation and flights. This is because when it comes to foreign currency, the rates will fluctuate not only on the day you buy, but also depending on the provider you choose. Look at using one of the main comparison sites available to quickly and efficiently compare foreign exchange rates.