One of the simplest ways to save money on your holidays is to make sure you don’t lose out when exchanging pounds into foreign currency.
As a rule of thumb, it’s best to plan ahead rather than buy your euros or dollars at the last minute, and it’s also worth checking how much your bank charges for using credit and debit cards in other countries.
Here are some common costly mistakes to watch out for, as well as a few tips on the best ways to exchange money.
Don’t exchange at the airport
Airports are probably the most expensive place to change money. Airport bureaux de change know they’ve got a captive market, and they charge accordingly.
The same applies to cash machines at airports which pay out foreign currency.
If you haven’t got any currency at all for the country you’re headed to, consider exchanging the absolute minimum at the airport – but bear in mind you’ll most likely be able to get money out of an ATM at your destination at a far cheaper rate.
Look online
High-street exchange rates are better than those at airports, but the best deals can usually be found online. Many web-based foreign-exchange companies will deliver your cash for free, provided you order enough, or you can even pick it up at the airport – in both cases, though, you need to plan in advance.
Check your cards
Taking all your holiday spending with you in cash can be risky, so you may also want to rely on cards – either for payment or for use in ATMs.
Find out in advance from your bank how much you’re likely to be charged for using cards in different circumstances. Some providers’ debit cards won’t charge extra fees when you withdraw money, while if you use a credit card at a cash machine, you’re likely to face all sorts of supplementary charges.
Don’t pay in sterling
Many hotels and restaurants in popular tourist spots now offer visitors the option of paying in sterling (normally on a card) rather than in local currency.
This might seem convenient, but in a lot of cases it can be a rip-off. That’s because the business you’re paying gets to set the exchange rate, and they are unlikely to give you a competitive deal.
It will usually work out cheaper to pay in the local currency and then face your own bank’s charges and exchange rate.
Don’t believe the press
The value of sterling is often the subject of news reports these days as the economic turmoil continues. But be aware that the pound’s value as quoted in the press is not going to be quite the same as what you get from a bureau de change.
For example, the official sterling-euro rate reported in the media is the value used by international money markets – but when we consumers buy currency we will always get a less favourable rate due to the margins built in by providers.
So if the news says £1 is worth €1.20, you are not necessarily being duped if you are only offered €1.16, say, when you buy your holiday cash.
