You have a list to tick off of things to pack, including everything from flip flops to tourist guides to seven pairs of shoes (when two will do ladies!). But, it's highly likely that in the rush to get off on holiday you've overlooked one of the most important things - where you'll get your foreign currency. Unfortunately, this could mean you're starting your holiday off on the wrong foot. In fact, the earlier you start researching how you'll get your holiday cash, the more money you can save.
Research from moneysupermarket.com found you could save up to £80 for every €1,000 depending on what option you choose for accessing money. Most holidaymakers rely on travelling with debit or credit cards with a small amount of cash as this is seen as a more convenient and safer option. However, factors such as foreign purchase and ATM withdrawal fees can soon bump up the cost, so choosing the right form of payment is a must.
Cash
It's always worth taking some cash even if you plan to use plastic for most of your holiday spending.
However, buying it at the airport or ferry terminal won't be the most cost-effective option. Moneysupermarket.com research shows that preparing a little bit earlier to get your foreign cash could save you as much as £57.
The best exchange rates are available from online providers such as Travelex and Online FX with rates that are much more competitive than waiting until the last minute and exchanging your money at the airport. You can order online and have your money delivered to your home.
Debit Cards
The easiest way for customers to transact abroad is by using the debit card they currently have from their own provider. However, figures show that by making just five withdrawals of £200 you could incur fees of up to £40 if you use the wrong card. This is because you'll be charged a withdrawal fee each time you take money out of an ATM.
If you travel regularly and like to use a debit card while you're overseas, then consider a new current account. The best for foreign usage is the Gold Classic account from Norwich & Peterborough as it doesn't charge if you use it to make cash withdrawals or spend on your card abroad. This current account requires you to pay in a minimum of £500 a month.
Credit Cards
As with debit cards most credit cards levy charges for overseas usage. You'll be charged a loading fee of around 3% each time you make a purchase on your card. If you use it to withdraw money from an ATM, you'll pay the loading fee and a cash withdrawal charge.
However, a number of credit cards can be used abroad for free. These include the Post Office Platinum, Halifax Clarity and Santander Zero and Sainsbury's Gold credit cards. However, even these cards should be avoided when it comes to withdrawing cash. Interest is charged from the day the money is withdrawn so even if you pay your bill off in full each month, interest can't be avoided.
Pre-paid Cards
Pre-paid cards are increasing in popularity and range and they are a great option for your holiday spending. As well as offering very competitive exchange rates, they are some of the few cards that can be used without any charges.
The CaxtonFX and Travelex cards have no fees for purchases or withdrawals. The FairFX card should also be considered as it tends to offer the best exchange rate out of the three, although it does have a small ATM fee that should be considered if you tend to make small and frequent withdrawals abroad.
Leftover currency
Hopefully, you've had such a good holiday that you've managed to find a way to spend every last bit of your holiday money. However, if you do find yourself with left over foreign currency, you still need to be savvy with your money if you want to get the best bang for your buck and exchange your leftover funds into UK currency. Buy-back rates tend to be far lower than selling rates for foreign exchange.
Bob Atkinson, moneysupermarket's travel money expert, says; "At the end of the day, ignore the smoke screens of commissions and exchange rates. Simply ask the question of how many pounds will I get back for my foreign currency and go for the one with the highest amount."
Think ahead and shop around
So this summer when you're compiling your list, make sure holiday money is the first thing you look at to help make your holiday budget go that little bit further. Shopping around does require some pre-planning but it's quick and easy to do and in the long run you will get more for your money.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct
We're free, independent and compare all UK credit cards, as well as offering exclusive deals you can't get anywhere else.
Contact moneysupermarket.com at Moneysupermarket House, St David's Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2011
Rate This Article
Click on a star to rate this article.
