The fact you’re a captive customer means the rates are hideous. Even if you leave it that late, pre-order for airport pick-up and it’s far better.
However, with the pound so weak, even that isn’t good enough. You need to make sure you’re maximising every pound (or dollar, or euro or even dong). Here are my five key travel money tips.
1 Pocket perfect plastic then just relax knowing you’ve got superb rates for every trip
Most debit and credit card firms get a near-perfect exchange rate from Mastercard or Visa, but then add a three per cent-ish ‘non-sterling exchange fee’ to what they charge us, so £100 of euros costs £103.
Yet a few specialist cards don’t add this fee, so when you spend on them you get the same near perfect rate the banks get in every country. This smashes what you’d get in bureau de change. My top two picks on these are the
Here are a few more quick tips on these cards.
Find out which you’re most likely to get. As these are credit cards, you’ll need to pass a credit check to get them. To find out which one you’re most likely to be accepted for, use my free overseas cards eligibility calculator at www.mse.me/eligibilitycalc.
Always repay IN FULL each month. This minimises the interest (12.9 per cent-18.9 per cent rep APR) otherwise the interest cost dwarves the currency gain. If you’re not going to do that, these aren’t for you.
It’s cheaper to spend on these cards than withdraw cash and spend that. Both because most have an ATM fee, and you pay interest on cash withdrawals even if you clear the card in full. This isn’t prohibitive though. Even after that (assuming you repay in full), cash withdrawals still beat most bureau de change.
You get the rate on the day. It’s worth noting, while I say you get the near perfect exchange rate, that of course fluctuates every day.
If you don’t want or can’t get a credit card, the www.Travelex.co.uk Supercard does the same thing, and doesn’t credit score, so anyone can get it. You link it to your existing debit or credit cards, then it charges them in pounds, at that day’s Mastercard exchange rate with no added fee. This makes it far cheaper than spending direct on most cards.
However, it charges a hefty 2.99 per cent for cash withdrawals and you don’t get the extra section 75 protection you do with credit cards.
2 How to find the best foreign cash rates
If you want notes in your pocket, the easy way is use my www.TravelMoneyMax.com (also iPhone and android apps), which compares over 40 bureaux to find which’ll give the best rate. If not and you’re doing it manually, the key is forget commission-free or any other nonsense and simply ask “How much will it cost me for €500 after all charges” and compare that way.
3 When’s the best time to get holiday money?
After the huge Brexit swings in the pound, this is the big question I’m being asked. Unfortunately, answering it would need a crystal ball. Instead, if you’re worried about swings, then it’s a question of trying to manage the volatility.
There used to be an easy way bureaux’s terms could be manipulated to give you protection against currency swings. Yet since Brexit they’ve tightened up. The only main one left is buying currency from www.SainsburysBank.co.uk. It lets you order at today’s rate for collection up to 30 days ahead, so if the rate gets worse you’ve locked in higher. If the rate gets better, then for £10 you can cancel, and thus buy elsewhere.
Another way to hedge your bets is to buy some now, and some when you go. This diminishes the impact of rate moves (good ones as well as bad). So get the best rates now, then use a specialist overseas card (see point 3) once there.
4 When they ask ‘pay in euros or pounds’ say euros
Use your plastic in shops abroad, or at ATM machines and you’ll often be asked if you want to pay in pounds or euros. Pay in pounds and the foreign shop or ATM does the conversion. Pay in euros and your plastic does.
On holiday once (Mrs MoneySavingExpert is very understanding) I checked the rates of dozens of cash machines and shops and every time paying in pounds cost more than in euros on even the WORST UK plastic.
5 The top overseas prepaid cards
With these, you load with cash before you travel, then use it like a debit card. If you lose it, your cash is protected. The rates can be very good, but unlike the credit card options above, you get the rate on the day you load/buy, not when you spend. So you’re at the mercy of currency fluctuations – for good or ill.
The top-pick cards are www.Revolut.com and www.WeSwap.com. The two are much of a muchness. Both give best prevailing interbank exchange rates and can be used in euros, dollars and other currencies.
If you want your money quickly, Revolut won’t charge a fee, and is best for those withdrawing smaller amounts, under £500 a month. WeSwap is best for those withdrawing larger amounts, over £200ish at a time. Otherwise there are fees.
Martin Lewis is founder and chair of Money Saving Expert. To join the 10 million who get his Martin’s Money Tips weekly email, go to www.moneysavingexpert.com/latesttip