Foreign Currency Exchange
Foreign Currency Exchange
When travelling out of the UK, the chances are you will have to purchase some foreign currency. Fortunately, you can buy foreign currency from a range of places, including, banks, supermarkets and post offices. Changing your money into another currency can be quite a difficult task as there are so many different options and variables.
When going on holiday, most people prefer to change their pounds straight into foreign cash as it is convenient and universally accepted. In order to get the best deal on cash foreign currency exchange, a quick online search will reveal to you who offers the best exchange rate and lowest commission fee. While a number of banks offer ‘no commission’, the chances are that they offer the poorer exchange rate to make up for it!
Although it may be tempting just to purchase your foreign currency when you arrive at the airport, this is not a good idea. Indeed, as airports have a captive market, they tend to charge high commission rates and often poorer exchange rates. In fact, a recent survey highlighted that foreign exchange at an airport can work out up to 11% more expensive than ordering the money online.
Pre-Paid Travel cards
One the latest ways to use money abroad is currency cards. This type of pre-paid card is replacing the old traveller’s cheques system and is safer than taking large amounts of cash. These cards work like a regular chip and pin credit or debit card and are preloaded with money online at a decent exchange rate.
These cards can be used like regular cards issued by a bank and you will not be charged for using your card. However, it is important to highlight that you are likely to be charged if you use your pre-paid travel card to withdraw money from an ATM. On average, the fee costs £1 per withdrawal.
At the moment pre-paid travel cards do not have worldwide coverage as you can only pre-load euros or dollars onto pre-paid travel card. In addition, while there are some promotional offers that will give you a free card if you pre-load a specific amount of money onto the card, in most cases you will have to pay upfront for the card, which is usually around £10.
If you do decide that a pre-paid travel card is the best option for you, you must remember to order the card well in advance as it takes some days for the card and the pin number to be mailed to your address.
Despite being less popular than pre-paid cards, traveller’s cheques are another convenient and safe way of paying for things abroad. One of the main attractions of traveller’s cheques is that they are more secure than cash because if you lose a cheque or it gets stolen, you can get a refund. Unfortunately, traveller’s cheques tend to offer travellers poor value for money when compared to other forms of foreign currency exchange.
How to Find the Best Exchange Rate
No matter how you decide to buy your foreign currency, be it cash, cheque or even in the form of a pre-loaded travel card, it is important that you are getting the best exchange rate. The best exchange rates give you more foreign currency for your pound. For example, an exchange rate of £1 = $1.70 is better than £1 = $1.50.
The best way to compare exchange rates is to use an exchange rate comparison site. This type of comparison site will tell you how much foreign currency you can get for your chosen amount pounds. However, they do not necessarily compare all the companies that sell foreign currency. Therefore, it is always a good idea to do some independent research as well.