Looking back, I wish I had taken more time to plan my travel money. I was travelling to Sao Paulo and due to the limited currency; I naively changed up ALL my travel money at the airport upon arrival. Now I know I could have saved almost 10% on my holiday money and in Brazil that is a LOT of Caprinhas on the beach.

Here are 3 foreign exchange treasures to ensure you get the most out of your travel money.

Plan in Advance

Whilst not exciting, planning your travel money in advance is the main key to saving money on your travels. If you are organised and savvy, it is most likely that you will get the best deals. Make sure you research travel money providers in advance and look out for currency ‘flash sales’.

If you have left your travel money to the last minute then try not to get it changed up at an Airport as this is where the worst rates on the market can be commonly found. Whilst it is not ideal, some companies allow you to order your travel cash online to be picked up at the airport. These are not usually very competitive rates however, they will be slightly better than just turning up at the airport kiosk.

Use Online Comparisons

As a rule of thumb, online travel money providers provide the most competitive rates. The companies have no costly overheads of kiosks and so pass these savings on to their customers in the form or more competitive exchange rates.

Ever growing in popularity are prepaid currency cards which many of these online currency specialists provide. These prepaid cards offer some excellent exchange rates even in restricted currencies and also, provide a safe way to carry money abroad. At the time of writing, Moneysupermarket.com is ranking FairFX.com top with their fixed 1.4% Foreign exchange fee on their Anywhere card.

Also available online are currency specific cards, usually found in Euros or Dollars. These cards are loaded with the specific currency at the time of the transaction and so you “lock in” your currency at the rate at that time. The currency is then available on your card for your trip having already been bought at that rate. This eliminates any holiday worries about fluctuating rates but can also provide an excellent way to take advantage of a great exchange rate prior to travelling.

Pay in the local currency

Whilst travelling, some retailers will occasionally ask if you wish to pay in Sterling. As tempting and easy it may seem to have the price quoted in Sterling, this price they offer will usually be inclusive of their own exchange rate. This rate is often a lot higher than that of any travel money provider or your bank. Always ask to pay in the local currency as this will often result in a lower price overall.

——–Author Notes——–

By Oliver Emery, frequent traveller and personal finance writer.

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Some of the tips are common sense, such as making sure all your contact details are up to date should unusual activity be flagged up on your account. You should always notify your credit company if you are going overseas to both ensure that you will be able to use your card and so the company know where you are.

Other handy tips include changing your money into foreign currency before you get to the airport, as the bureaux de change in airports are notorious for offering poor exchange rates. Also check that you are taking a card abroad with you that does not incur international fees or charges, and when possible pay in the local currency when making a credit card transaction.

There are other hints that many may not think about, but they do make a lot of sense. If you are purchasing an item over £100, try to use your credit card as you may then have some comeback if something goes awry, and also make one large withdrawal rather than several small ones from the foreign cash machines as each withdrawal will incur a charge.

Further information about this campaign can be found on the Capital One website, and they are encouraging all their customers to check this out before they go away.  There are numerous things that can go wrong when you are away in foreign climes, so it makes sense that something as important as your spending money and credit cards are in good order and that you know you are protected should the worst happen.

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Five top facts:

1 – Certain specialist credit cards are the cheapest way to spend abroad.
Most credit cards add around a 3% fee to the exchange rate to make themselves money. There are however a few that don’t which means you get excellent exchange rates that beat the best you can get elsewhere. If you can get your hands on one of these cards, keep it for spending that you do overseas, and make sure you repay it in full to avoid being charged interest.

2 – Never ever change money at the airport.
The very worst exchange rates can be found at airports and ferry terminals because you’re a captive customer. If you really want to get your money just before you travel, then pre-order it for pick up to get a better rate than just buying it there, but it’s still not a great way to exchange money.

3 – Debit cards can be the most expensive way to spend abroad.
So those specialist credit cards we mentioned above give great rates. Well most cards don’t in particular debit cards. Some debit cards add up to £1.50 per transaction for EVERY transaction you make while you’re abroad and that really can add up. Those which are the very worst include:

Halifax Debit Card – Spending Fee £1.50, Load fee of 2.75%, Cash withdrawal fee of £1.50
Lloyds Debit Card – Spending Fee £1, Load fee of 2.99%, Cash withdrawal fee of 1.5% Min £2, max £4.50
IF Debit Card – Spending Fee £1.50, Load fee 2.25%, Cash withdrawal fee £1.50 or 1.5%
RBS Debit Card – Spending Fee £1.25, Load fee 2.74%, Cash withdrawal fee 2% min £2, max £5.
Natwest Debit Card – Spending Fee £1.25, Load fee 2.75%, Cash withdrawal fee 1.5% min £1.99.
Santander Debit Card – Spending Fee £1.25, Load fee 2.75%, Cash withdrawal fee 1.5% min £1.99.

4 – If you’re asked if you want to pay in UK Pounds, or Euros, choose Euros.
If you pay on a credit or debit card and get asked to choose which currency to pay with, always choose to pay in Euros. The reason is that if you pay in £’s then the shop does the conversion, and they always fix the exchange rate in their favour.

5 – Be careful how you buy foreign money
You can compare holiday money on comparison sites to find the cheapest rates, but there’s another hidden charge you may encounter at the bureau de change. All credit cards and some debit cards charge a cash withdrawal fee, so make sure yours doesn’t before you use it.

An alternative to using a credit or debit card is of course the prepaid travel card. These are cards that you load money onto and then use as if it were a credit or debit card. While these don’t offer quite as good a rate as the very best specialist credit cards, they are very useable abroad, and the big advantage is that if your card is lost or stolen, you can get it replaced for a small fee with all the money still on it, and no worries about risks to your bank account.

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Paying for your items

If you are planning on purchasing a large or expensive item then taking the money to pay for it with you in cash that you have changed into the local currency before you leave, is probably not a very safe or wise choice. For this reason your travel credit card or debit card is a useful ally on your travels – but be warned, there are many different charges that you cards provider may levy, which can catch you out and cost you a lot of money if you are not aware.

These charges can include a loading fee, which is a charge that is tagged onto the exchange rate by your bank when you use your credit card overseas – usually around 2.75% – which will not be visible on your statement. This means that unless you study your terms and conditions carefully you would never even know when a loading fee has been charged. If you spend a significant amount of time abroad, perhaps at a holiday home or for work, then it may be worth opening a bank account in that country and using a money transfer service to send money abroad from your home bank account.

The rates charged by credit card companies do vary, but the best way to avoid them is (if you have one) to use a debit card whilst abroad. Debit cards are better for use in a foreign country as you not are usually charged interest or extra fees for using them to withdraw cash.

Getting them home

Hardened holiday-shoppers will know before they leave to pack only the barest of essentials, leaving the maximum luggage space for their new purchases. With items that simply will not fit, however many extra suitcases you buy, you have two choices. Firstly, if you are buying from a large retailer they may be able to send the item themselves, saving you the trouble of both packaging the item and arranging for a private delivery.

If this is not possible and with smaller retailers that will often be the case, then you could always post the item yourself – either via a local post office or established courier service. With both of these options it is vital to pay for insurance on the item and also to request an itemised receipt, which details what you are buying and how/when it is to be sent.

A Post Office Feature

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For example, did you know that most high street bank credit cards charge fees and commissions when using your credit card abroad?  It’s true, most banks charge extra simply for the privilege of using your credit card out of country on holiday.

It is not true, however, if you are using a Post Office travel credit card.  Post office credit cards charge no commission for using their cards abroad or using a Post Office credit card to purchase Post Office travel money.

When making travel plans, you need to be as frugal as you can.  You don’t want to be spending money on fees and commissions that would better serve you spent on sight-seeing and souvenirs.

Post Office credit cards help you avoid those fees so there is more money left to spend on your holiday instead of your credits charges.

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Currency exchange rates are very difficult to compare. Some bureaus and banks offer currency at “zero percent commission”, but in fact the actual exchange rates offered are often uncompetitive. Using your debit card abroad can be even more costly as you will not know what exchange rate is being applied to your purchases and withdrawals until you get home and study your bank statement. The TorFX card offers you commercial exchange rates (which are based off the live “interbank” market price), and also charge no commission, giving you total transparency and excellent value every time you load your card.

The Travel Money Card works just like a debit card, and offers many benefits including chip and pin security, far better exchange rates than traditional bureau de change (up to 10% better), and the ability to “ring fence” your holiday funds from your bank account. A sterling card is also available, offering users an ideal way to reduce the risk of online fraud. Since the card is “prepaid” and cannot become overdrawn, it is a simple way to safeguard against online card theft and fraud.

TorFX (www.torfx.com) was recently awarded second place in the prestigious FastTrack100 league table published by The Sunday Times.

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