5 ways to make your holiday currency go further

This year’s Easter sunshine breaks are now cheaper than they were 12 months ago – especially if you stay within Europe.


The pound has jumped by some 5% against the euro since March 2013, and this has made short-haul destinations such as Malta, Majorca, Cyprus and Tenerife more affordable for Easter getaways, according to new research from M&S Bank.

Majorca is the cheapest option – the findings say you can spend a week there for just £253 per person - and European destinations are not the only ones going down in price.

The cost of holidays to the Dominican Republic has fallen by 1.2% since this time last year, for example, with favourable exchange rates slicing £46 off the budget needed for a one-week trip. That said, an Easter break there will still set you back £918, largely due to the cost of the long-haul flights.

But the improving strength of the pound will only help you if you scout out the best exchange rate, while credit card charges could quickly wipe out any savings if you use your plastic unwisely.

So here’s MoneySuperMarket’s five top tips for minimising the cost of Easter fun in the sun for you and your family.

1. Shop around for the best exchange rate and get cash in advance

Many people forget about ordering foreign currency until the last minute. However, being disorganised about sourcing your holiday money could add a significant wedge to the overall cost of your trip – especially as the worst exchange rates are often found in airport foreign exchange bureau.

To make the most of your pounds, it makes sense to shop around, and even consider online providers that often offer superior exchange rates and great deals on commission.

FairFX, for example, is currently offering MoneySuperMarket users 0% commission on internet orders that can be delivered to your home the next day. There is a £6 charge for this service, unless you order at least £750 worth of currency, in which case delivery is free.

Other 0% commission providers to take a look at include Travelex, the Post Office, Sainsbury’s and Moneycorp. You can visit our travel money channel here.

2. Pack the right credit card

A credit card can be very useful while you are away, but beware: spending on your plastic while overseas can result in a post-holiday bill that is inflated by a raft of sky-high charges.

These include so-called loading fees, which are typically around 3% - meaning spending £100 in euros will cost you £103 – as well as potentially costly exchange rates.

There are a few credit cards that are designed for overseas spending, however. Halifax Online Clarity, for example, charges no loading fees or even cash withdrawal fees from an ATM anywhere in the world and has a competitive representative APR of 12.9% (variable).

If you are aged over 50, you can also apply for the Saga Platinum card, which again has no loading fees and an even lower representative APR of 11.9% (variable).

There’s also the Post Office Platinum Card which comes with no overseas loading fees and no cash advance fee when you get your travel money from the Post Office. It has a representative APR of 17.8% (variable).

Read more about the best cards to take overseas.

3. Check the cost of withdrawing cash

As described above, withdrawing cash with a credit card can cost you dear – especially when you are abroad.

The same is true of overseas debit card withdrawals, the majority of which attract a fee of around 2.5% or £3, whichever is higher.  And in some countries, such as the US, the banks providing the cash may also charge an additional fee.

One way to mitigate the impact of these charges is to try to withdraw as much as you need in one go, thus avoiding paying at least £3 on several smaller amounts.

You can also check with your bank whether it has any links with overseas banks that will keep costs down. HSBC customers travelling to New Zealand, for example, can reduce the cost of withdrawals by using HSBC or Westpac machines.

To avoid any problems while you are away, it is a good idea to let your bank know you are going too.

 4. Steer clear of dynamic currency conversion

When you use a credit or debit card to make a purchase overseas, the card machine will often ask you whether you would like to pay in pounds, or in the local currency – something known as dynamic currency conversion.

Choosing to pay in pounds means that you will see exactly how much will be charged to your account for this transaction. But – and it’s a big but – the exchange rate provided by the retailer if you opt to pay in pounds is often much poorer than the one you would receive from your card company.

So it makes sense to choose to pay in the local currency, as this will generally cost you less overall.

5. Don’t take out foreign currency on a credit card

Most credit cards will charge you cash advance fees if you use your card to get foreign currency – either from a cash machine or from a foreign exchange bureau – as well as immediate interest, often at above 20%.

More than that, you will also start being charged interest immediately – meaning it will cost you even if you clear your balance when your monthly statement arrives.

While Halifax Online Clarity is the exception by making no charge for overseas cash withdrawals, the card will still charge immediate interest at 12.9% (variable) on your withdrawal from the word go.

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.


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