Buying foreign exchange

By | Category: Travel tips & opinions

This morning the pound dipped below $1.21. Against the euro it was about €1.09. This is a slight improvement on yesterday but still very low for the year and even lower compared to last August.

It means that us ordinary mortals travelling on holiday his weekend will find it hard to answer the question about when to buy our holiday money.

You can listen to all the experts you like but they are just as likely to be wrong as the rest of us. And the prices I quoted above are not the prices you are going to get from the bureaux de change. They will be much lower. Expect to get – at the very best  – about three or so cents less.

Given that your holiday is booked so looking for cheaper destinations isn’t an option, how can you get the best rates?

For a start, don’t change money at UK airports or at St Pancras International (for Eurostar travellers) unless you have absolutely no choice whatsoever. The rates will be even lower. Order your currency online and collect it at the airport. Remember that many airports or terminals have just one supplier of foreign exchange and you are trapped into their rates. If you are a few weeks away from your holiday, order it and have it delivered to your home.

That will provide a better rate. If you have time before leaving check rates at the Post Office and supermarkets; they might be better but the situation varies day-by-day. Banks and other retailers who have a forex service like Marks and Spencer might offer better deals. For example if you buy money at Debenhams, they have an offer at the moment where you get a £5 voucher for every £20 foreign currency you buy. You also get a slightly better rate with retailers if you have one of their credit cards.

Try not to withdraw money for cash machines whilst abroad as there will often be a charge for doing so and another for conversion. Even paying on a UK bank issued credit card will give rise to a conversion fee that you will see on your credit card statement a month

An alternative is to use a pre-paid currency card. This increasingly popular method of taking money on holiday usually works out cheaper.

Newer entrants have come into the market in the last decade but check that they are authorised first.

Then there are organisations like WeSwap which matches buyers with sellers of currency. Their rates should also beat any walk-up rates you would get at an airport.

But whichever method you use this weekend and over the coming month you will be at the mercy of the traders who bet on which way a currency moves as they drive it up and down in the hopes of a profit.

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