If you ask a frequent traveller for their top travel tips, chances are they’ll mention currency exchange. If you’re new to going abroad, then you’ll be busy tackling the basic challenges that come with travelling to another country, like passport applications, flights and accommodation and that pesky little detail of getting enough time off work. But while making sure you’re getting the best deal on your travel money might not be as much fun as booking your hotel or deciding what tours to take, it could be a simple task that ends up saving you lots of money.
Last resort, worst deal
Most sources will recommend that you sort out the travel money situation before you leave. As Money.co.uk says, “the airport is the travellers’ last resort when it comes to changing travel money. Forex companies know this and take advantage of the situation by upping commission fees and dropping exchange rates at in-airport branches.”
Even those who know that the airport is the worst place to buy foreign currency, still end up doing it simply because they didn’t think ahead and there’s nothing worse than landing in another country and realising you’ve only got home currency. The Guardian reports that the Post Office “says more than £21m is wasted annually on buying currency at the last minute at UK airports due to poor exchange rates and commission charges on lower-value transactions.”
But of course it’s not as simple as avoiding airport bureau de changes either. Banks, according to the British finance website, “rely on customer loyalty so offer lower exchange rates in branch” meaning that you get less foreign currency for your money.
More is less
Whether you’re smart and buy your currency before you leave or found yourself having to buy more whilst abroad, you will get a better deal the more money you exchange.
It’s better to overestimate your needs a little in order to get a better rate. Find out what the exchange thresholds are and try and get your transaction into the range that offers a better rate. According to The Telegraph’s Travel section, “most people will top up their spending money when on holiday, which can be tricky when some foreign banks close over the weekend” they advise to buy more than you think you might need as “most travel money companies offer a ‘buyback’ service, where they will buy your currency back at the same rate you bought it. “
If you still can’t get a better rate, try pooling together with friends to boost the amount you need to exchange.
Prepaid Travel cards
Heralded as the traveller’s check of the 21st century, prepaid travel cards are shaping up to be a great way to manage your money while abroad. There are some big benefits to a prepaid card compared to the obvious alternative of a credit or debit card. The first of which is there is no risk of going into overdraft or running up a debt. The amount you load is the amount you have to spend, period.
Secondly, as The Guardian reports, “prepaid cards are typically linked to the Mastercard or Visa network and are protected, like bank cards, by a chip and pin system. But, unlike bank cards, they are not connected to your bank account or credit card account. So, if lost or stolen, fraudsters cannot get access to your money beyond that loaded on the card.” The link to these well-known networks, also means that unlike some brands, your card will be accepted almost everywhere.
The fact you can buy the currency at a fixed rate and store it all on your prepaid card is the third benefit of managing your travel money this way. Of course you should always compare the various prepaid cards on the market, using web-based comparison tools to choose the best card for you.
As with everything, take the time to shop around. Get the best rates of exchange, check that you’re not over-paying with load fees or commissions. Have a look at the exchange rates over the last months and read the newspapers to find out what your destination currency is likely to do in the near future and try to buy at a peak rate.
Whether you order it online and get it delivered, or arrange to pick it up in-store or even at the airport, shopping around is key when it comes to getting the most for your money.
If you’re left with having to exchange money while you’re overseas, then there’s no harm in asking for a discount. Everyone wants your business and if you choose a bureau de change in a populated area with many outlets, then you’re likely to get a better deal just by asking.