How to beat the currency exchange fees on your next holiday
British holiday makers are being fleeced exchanging their currency for holiday when at the airport.
Over the past three months The Times surveyed 20 British airport bureaux de changes.
They found that, on average, the exchange rates offered by airport-based bureaux de changes were 13 per cent higher than the market rate.
In some cases, the rate offered was a staggering 26 per cent higher. The difference in European airports was less dramatic; at Copenhagen Airport, for example, the difference found at Dankse Bank was only 3 per cent.
While the rest of us feel the pinch of the the pound's devaluation, bureaux de changes in airports are raking it in - airport profits from currency exchanges have risen to £100m.
With holidays getting more expensive, travellers should be looking to trim their spending as much as possible.
Here’s our four-step guide on how to spend money abroad without breaking the bank.
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First of all, you should avoid exchanging their currency at the airport. The rates offered by these onsite locations are simply not worth it.
Even if British airport currency exchanges weren’t such rips-offs, they would still be more expensive than currency exchanges offsite, purely for the fact that they have a captive market.
If you’re in the airport in need of some euros but have nowhere else to go, bureaux de changes are going to charge a premium. Make sure you shop around for the best exchange rates in advance.
Sort out your foreign currency before you travel, or have a smart plan to access cash abroad. A little forward planning could save you a lot of money.
Sometimes the best currency to bring to a country you are visiting on holiday isn’t always the currency of that country.
As bad as the pound may be doing, some currencies around the world are performing even worse.
So bad, in fact, that not even locals want to trade in it. In such countries another, stronger currency is often the preferred way to pay.
Many Caribbean island nations, for example, would rather accept payment in US dollars. Using the preferred currency when making a purchase can result in getting a better price. As ever, be sure to do your research.
The right account
It’s not always necessary to bring hard currency abroad.
Depending on the choice of account, travellers may get favourable rates when accessing foreign currency abroad.
However, be sure to choose the bank and type of account wisely. Some accounts offer better terms than others.
One of the best accounts is the Barclay's Platinum Travel Card. This product give you the ability to spent abroad, as a credit card, with no fees.
At the same time, it allows you to withdraw up to £500 - again, with no fees.
Nationwide have a flat charge £1 for transactions on their flex account debit card, while other accounts, such as the Santander Zero Card, have no fees for either withdrawals or payments abroad.
Another option is to put money on a Halifax Clarity credit card. This offers no fees for use abroad. At the same time, Halifax does not charge a fee for withdrawals abroad.
It does charge interest on the amount withdrawn, but there is a way around this.
Top up your card before you travel abroad to put yourself in credit. This will allow you to withdraw cash from the credit card without facing interest fees.
For people over the age of 50, the Sage Platinum credit card is a good shout. It charges no foreign currency fees.
Be a specialist
One way to avoid bank fees is to use specialist travel cards.
Issued by companies such as Travelex and Caxton FX, the cards look and work like credit or debit cards. Holidaymakers prepay their money onto the specialist card for use in the intended currency abroad.
The exchange rate is whatever the exchange rate is on the day. This can sometimes be quite profitable if the foreign currency in question later goes up in value. However, it could always go the other way – leaving you staring at a loss.
The point of such cards, though, is not to gamble on currency fluctuations. Their benefit is to provide an easy way to spend money abroad without hidden or extra fees. For most specialist cards, using the card abroad incurs no fees and nor does loading the money.
Do you have any tips for making your pound go further when abroad?
Let us know in the comment box below.
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