Firstly, know your money. Some countries do not allow their money to be exchanged/traded internationally, so you could find yourself with hundreds of pounds of Moroccan Dirhams and nowhere to put it but your kitchen drawer, next to the cello tape and the scissors.
Exchange rates change daily and sometimes even more often. Advice – check, check and check again in the lead-up to your holiday. If you are prepared and vigilant you’ll see the rates change over the weeks and months and get a good idea of what is either a good or an I-can-live-with-it price. Remember, no one expects you to be an expert, but a little light reading and a keen eye can save you pounds.
Internet vs The High Street. If you are not in any hurry, ordering your holiday money over the internet can save you a multitude of hidden fees. Using a comparison site will ensure that you can get the best exchange rates. Avoid that nervous walk home with thousands of un-nameable foreign notes crammed in your purse and have the money delivered direct to your doorstep.
Prepaid travel cards or Travel Money Cards are a do-what-says-on-the-tin method of currency. Simply transfer however much you like onto the card and spend. Be aware that some prepaid travel cards have hidden fees – check before use. Most are available through VISA and MasterCard, so are accepted in most places. They can also be of use if you wish to give your child spending money abroad. There’s no credit function, so little Jake or Teresa can’t overspend.
Paying in a foreign currency (Pounds) in a local country, you are always likely to incur charges. If you have already exchanged your currency, use it. The fees that are added to your transaction may seem small and inconsequential at the time, but a later look at your receipts would likely prove you wrong.
Commission charges are high and rates are low. Why? It’s a captive market. You’re stuck now, too late to go to the high street or exchange money online.
Once on holiday you are ‘on holiday’. You are in a bubble and the exchange rate is generally set. You can trawl the local high street; looking through the windows and comparing the exchange rates, or you can go to the beach.
Using a Credit Card to pay for products and services while on holiday can be a fee-inducing nightmare. Foreign exchange fees and loading charges can near 3% and one-off ATM withdrawals are a similar charge. Also, paying for a service, the retailer may amend the payment method to “dynamic currency conversion”. This way you see the price in the local currency, but the exchange rate can be high.
Traveller’s Cheques are possibly the securest method of transporting and spending money while on holiday. While the prospect of repeatedly exchanging your cheques for cash might seem annoying, they are replaceable if stolen – cash is simply lost. The downside being that Traveller’s Cheques are limited in the currencies available – only 6 at present.
The best time to buy money is when the exchange is in you favour. Watch for the changes and act accordingly. If the rate is low, but you think it may go lower; you could exchange some (not all) of your holiday money and wait for later, when the exchange gets even better or, eek, gets worse. Always check the commission fee and decide if this is of financial benefit before exchanging your hard-earned pounds.
If you’re comparing your exchange service, you should do the same with your travel insurance. Get a travel insurance quote from Medicaltravelcompared.co.uk, we compare over 40 travel insurance companies providing you with choice and flexibility.
Tell your bank in advance of your trip abroad. If banks see “unusual activity” on your cards they can and will suspend the service. Don’t be stranded without a credit card to your name.
You could always take a little of everything with you; a few pounds here, a few local “dollars” there, a handful of traveller’s cheques, a prepaid card and a credit card. Just remember to keep them safe and separate, but know where you’ve put them.
Be sure to check out overseas travel tips and tricks to bag cheap flights, hotels & more from MoneySavingExpert.com.