Know your stuff when it comes to holiday money
Airlines and holiday companies are announcing that bookings for trips overseas are selling out, as sun-starved Brits head abroad for the first time since the pandemic.
But not everything has returned to normal. A lot has happened since the pandemic, from airport security to ongoing travel restrictions.
You’ll also find when you go to buy foreign currency that things have changed in this sector too.
A lot of Bureau de Changes went bust over the pandemic for obvious reasons. That means there’s a whole new breed of currency businesses – and new ways to pay for things abroad.
Here’s what you need to know.
Buying cash
Finding the best exchange rate before you travel is vital.
There have been a lot of currency fluctuations lately, so keep an eye on the rates. MoneySavingExpert has a comparison tool that helps find the best rates near you.
You can usually opt to get your money in person or have it delivered. In the interests of research, I went down to meet the Currency Online Group, who had the best rate from the MSE tool in Waterloo.
I was rather surprised to find that the company wasn’t based a shop, instead it was in an office space.
The advantages of this are you sit in a private room while your money is counted, so you aren’t a target for opportunistic thieves on your way home!
When I researched exchange rates and fees, these new services came out on top over banks or more established names. Factor in delivery charges though.
Using a credit card
Surprisingly, some credit cards give you the most competitive exchange rates on the day you spend.
However, not all credit cards are equal so don’t assume that the one you currently have will deliver.
Specialist travel credit cards exist specifically for the holidaymaker and don’t generally charge fees, but withdrawing cash can be costly.
You can compare the best cards online but be aware the application process, acceptance and delivery might take weeks. Other credit cards may have good rates but check what the fees are for using them abroad before you travel.
Credit card purchases are also covered by section 75 of the Consumer Credit Act if you spend more than £100 on goods or services, which can be useful if you’re paying for flights or accommodation and it gets cancelled or there’s a problem.
This is because you can claim back the money from your card provider if there’s a dispute. But pay the card off immediately or you’ll be hit with high interest.
Using a debit card
Paying by debit card – and withdrawing cash in particular – can be a pricy business abroad. Most of the main bank cards bill you all kinds of fees per transaction and the exchange rates are often poor.
Step forward then, the new digital banks. These online services often offer very travel friendly cards with a bank account.
The best ones don’t charge fees and the exchange rates can be reasonable. You can apply online for the accounts easily and if you just want to use them abroad, all you need to do is transfer over some cash.
This is a good idea if you want to take a mix of travel money but have a card available too for spending so you’re not carrying a load of currency around with you.
Pre-paid travel cards
You can also get your currency on a pre-paid card, which can be useful if you want to ensure that you’ve got a specific exchange rate.
Check first to see how widely accepted they are. There’s nothing worse than having travel money but not being able to spend it.
Doing a bit of research on the best spending options for you can save you a fortune abroad. So prep in advance and you’ll make the most of your money on holiday.
Get help with all things travel related at resolver.co.uk