When it comes to planning for a vacation, having currency ready is often last on all of our minds. If you have a busy life or a large family, then there are lots of other concerns to take care of before you travel, and often it’s forgotten till the last minute. Many of us have resorted to the airport bureau de change or used a credit card at our destination, and winced at the paltry exchange rate and sky-high charges we know will await us on our monthly bank statement once we get back. If only we had given it a thought before we left home!
The good news is that, with a little planning, it’s easy to get foreign exchange at a great price. It doesn’t take much time or effort. With modern technology putting information at our fingertips, there’s no need to rely on a local travel agent or put in any time-consuming orders at your local branch of your bank.
There are plenty of websites where you can input your currency and amount, and see the best prices from a number of providers. These could be online brokers or bureau de change with a storefront. The amount of foreign exchange or forex you receive will depend on the provider’s individual exchange rate, which they can set to be whatever they want, but will usually be a little less than the official exchange rate. You will be able to see exactly how much money they will offer you in exchange, and if it’s possible to get it delivered or if you have to collect yourself. Remember to factor in any extra charges which may be hidden – these could include agent commission, handling fees or delivery charges. If the charges are high, then it may be more economical to get your travel money through another provider.
These companies have very few overheads as they operate entirely online, so this is a good way to get the best price possible. You will need to place your order online then the money will be delivered to your home. There is usually a 24 or 48 hour delivery time, so it’s not ideal if you have left your travel money until the last minute. Make sure you choose a reputable dealer that has insurance and a registered company address in the US. They should also have an HMRC number and company registration number.
All of us have debit and probably credit cards too. While it’s tempting to forget about advanced preparations and simply use these cards while you are on holiday, be aware that it won’t be the cheapest way to get cash. Debit cards can offer competitive rates at ATMs abroad but credit cards most definitely will not. In fact, there’s usually hefty extra charges if you use a credit card at a foreign ATM, making this one of the most expensive ways you can obtain a foreign exchange. Credit cards are best used for purchases instead, as you will receive a level of insurance from your provider which can be very useful. There are credit cards that are designed specifically for use abroad, and these generally have lower charges and fees – but bear in mind if you borrow money, then you will be charged interest unless you pay it off immediately.
These are a relatively new invention that has replaced traveler’s cheques as the ‘safe’ way to get your holiday currency. These cards look like debit or credit cards, but they are actually pre-loaded with money before you travel. Prepaid cards are MasterCard or Visa-badged, so you can spend wherever you see the symbols (which is nearly everywhere). The cards can be bought online, from travel agents on the high street, as well as banks and even supermarkets. Simply choose your currency – dollars and euros are the most popular – and pay for the card with your money on it. The big advantage with this kind of travel money is that, if you lose it or it’s stolen, it can be replaced. You may have to pay a fee for this service, though. It’s also much more portable, as you only have one or two cards to carry around rather than wads of notes. Also, check before you buy if there is an ATM charge for the card, or a charge to buy it. If you plan to take out small amounts of cash regularly from ATMS while you are on holiday, then a prepaid card that doesn’t charge an ATM fee will be best for you.
If you don’t have time to order online and really need cash rather than a card, a high street bureau de change may be your best option for cheap travel money. Travel agents will usually have a foreign exchange and forex desk, as do many banks. Shop around for the best exchange rate, and check for additional charges such as commission. If you don’t have much time this may be a suitable option as it will be instant. Avoid airport bureau de changes as much as possible, as these places know there’s no alternative available, and push their charges and exchange rates up accordingly.
These are the traditional choice but come with a host of extra charges. You may find you get charged for buying the cheques, then charged again when you use them. They can be replaced if lost or stolen, and for this reason are a safe option, but they don’t offer the best value for money.
This is not a type of currency or foreign exchange, but is something to look out for while you are away. If you use a card to pay for something, make sure when paying that the merchant has not switched the currency to sterling. This is called ‘dynamic currency conversion’ – basically the price you are paying has been converted from the local currency into your own, and you will be charged for the privilege. It’s entirely unnecessary, so just make sure the amount on the chip and PIN device is in a local currency when you enter your PIN or sign.
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