Trip tips to help make most of exchange rates
BRITONS returning from an Easter break overseas may find their trip cost them far more than expected thanks to the derisory exchange rates routinely charged at airports.
Holidaymakers may have lost up to a quarter of their spending cash by purchasing currency at departure lounge booths.
Buying at the airport could add hundreds of pounds to your trip compared to buying online in advance. FAT MARGIN Last Thursday, Moneycorp was offering holidaymakers at London Stansted Airport an exchange rate of just €0.91 for each £1, a 20 per cent markdown on the interbank exchange rate of around €1.14.
Similarly, Moneycorp was offering travellers to the US just $1.07, some 24 per cent below the spot sterling/dollar exchange rate of $1.40.
These rates are by no means an exception. Currency services at airports across the UK will have been applying similar exchange rates as Britons made their great Easter escape.
Moneycorp was offering travellers who had pre-booked their travel money on its website far better exchange rates of €1.13 and $1.39.
Somebody exchanging £1,000 would get just €910 at the airport but €1,130 online, giving them an extra £220. US-bound travellers got $1,070 at the airport, but $1,390 online, an extra $320.
Pauline Maguire, retail director at Moneycorp, defended the difference in charges: “The reason is the significant cost associated with operating at airports, from ground rent and heightened security checks, to staffing the bureaux for early and late flights.”
She even urged travellers to pre-order their travel money through the company’s website. If you do, you can collect at the airport, while paying the online rate: “We always encourage our customers to do this, and increasing numbers of people are planning ahead in this way.”
Maguire said that around half of its holiday money transactions now come from “reserve and collect” customers. BOOK ONLINE Moneycorp’s online rates compare favourably with other online currency services, with ICE also competitive, charging €1.12 and $1.38.
Emma Coulthurst, resident travel expert at comparison site TravelSupermarket.com, said as a rule never change your cash at the airport: “Airport and ferry port rates are dismal as they know they are the last port of call before getting on board and that you are a captive customer.”
You may have to pay a delivery charge of around £5 when booking currency online, but this is often waived on larger orders or if you collect at the airport. CARD COSTS Coulthurst warned that you can also pay foreign transaction charges if you use your everyday debit and credit card overseas: “Many carry a 2.99 per cent fee and may also impose additional one-off fees on purchases.
“Lloyds Bank and Bank of Scotland debit cards have a 2.99 per cent transaction fee plus a 50p non-sterling fee, so a £100 purchase costs £103.49.”
She suggested applying for a credit card designed for overseas use, such as the Halifax Clarity Credit Card, which has no overseas fees and attractive exchange rates, although you still pay interest on cash withdrawals: “MBNA, Creation and Norwich & Peterborough Building Society also offer competitive overseas cards,” she said.
Pre-paid travel cards from Caxton, FairFX, ICE, Moneycorp, the Post Office and others also allow you to lock into a competitive rate but, as always, compare charges.
David Black, finance specialist at DJB Research, said you should shop around for the best deal and use an online tool such as TravelMoney.MoneySaving Expert.com.
He added: “In some countries you can get better exchange rates from bureaux de change, but exchange rates offered by hotels may not be very competitive.”