When it comes to going abroad, whether it’s for a holiday, a business trip, or to see family, planning ahead for your currency can help you pocket some extra spending money.
Last minutes exchanges or using your debit card abroad can be costly mistakes.
MMM’s guide on holiday money will help ensure your pounds stretch further.
Currency exchange at the airport
This is a big no no. Most of us in the excitement of packing and planning our trip tend to leave currency exchange to the last minute and end up doing it at the airport.
This is where the worst deals are as exchange rates at the airport are usually very poor.
To overcome this, before you travel, order your currency online, which if you do via Travelex or American Express, you can pick the money up at the airport or even the currency delivered to you.
The best rates are found online.
No matter where you get your currency from, do it online. You will always get a better rate online.
If you are, for example, planning to join the travel money queue at the Post Office, have a look at the online rate instead, which will be higher.
Using debit and credit cards abroad
This is another big no no – unless you have the right card.
When abroad, most people will take some cash and for the rest of their spending use their debit or credit cards, but this is an expensive way of spending.
Most debit cards will charge you around £1.50 for every transaction you make and credit cards will also have add on significant charges for usage abroad.
You can avoid these charges by selecting a credit card that is traveller friendly.
Some of the best credit cards to use include:
*Halifax Clarity – no charges for usage outside the UK
*Capital One Aspire World – no foreign exchange fees, plus 1.25% cash-back on purchases in the UK
But be warned, these credit cards are only worthwhile if you are in a position to pay off your monthly bill in full each month to avoid hefty interest charges.
You should never spend what you can’t pay off in full.
If you are rubbish at sticking to a budget or would rather not take put a credit card, then consider a pre-paid card.
We call these the modern day equivalent to traveller’s cheques – you to load up currency onto a card, which you then use abroad as though you were using a debit card – but without the charges.
You can the pre-paid card in restaurants, shops and for cash withdrawals at ATMs.
You can stick to a budget, as you can only use what you load.
Exchange rates are competitive and it’s safer than carrying cash around.
There are no credit checks involved, so you don’t have to worry about your credit rating either.
You can get one online from a number from a number of specialist providers, such as:
Paying in the local currency
Quite often, retailers or ATMs will ask you how you want to pay. It’s always better to pay in the local currency of the country you are in. You will get the better rate.
What to do with your currency on return
If you think you may come back from holiday with a fair bit of currency still leftover, then make sure you keep your original exchange transaction receipt.
Retailers such as M&S Bank and Post Office, will exchange it back commission free.
Alternatively, you can purchase a buy-back guarantee, which is available via Travelex, which for a small fee, will exchange your currency back into pounds for the same exchange rate; this can be useful if you are going somewhere where currency fluctuations are common and you want to ensure you don’t lose out.
Of course, you can also donate it. Many airlines will collect leftover currency from passengers for charity.
Staying in the UK?
If you’re staying in the UK, you can make use of your childcare vouchers for holiday clubs. You could save up to 38% of the costs if both parents are making use of childcare vouchers. Check with your provider what offer they have and where the vouchers can be used during the summer.
Please note, the childcare voucher system is due to change in Autumn 2015 – we will keep you posted. Until then, it’s business as usual.
Finding the best currency deal
If you want to know where you can find the best currency deal and what the exchange rates are, go to My Currency Transfer