If you’re going abroad, it’s never a bad idea to carry some of the local currency. Since it’s normally cheaper to organise your cash before you jet off, we list some of the best and cheapest providers around.
If you’re holidaying overseas to catch some sun or you’re on an urgent business trip abroad, there are a variety of ways to spend your money. One of these is to exchange your cash for foreign currency to provide a great alternative to card payments.
But making sure your wallet is topped up with the right notes is different to choosing the right credit card. In this article we explain:
Read more: How do exchange rates work?
NEW: Use our currency converter for real time exchange rates
What is the best option for travel money?
While you’ll be able to make all your purchases on a card in many countries, it’s never a bad idea to have a backup spending option. It’s always useful to have cash. You might you lose your card or it could be declined and some places just do not have the facilities to accept cards.
However, if cash is stolen or lost to a scam there aren’t any protection schemes in place. A travel credit card, meanwhile, does offer some level of protection through Section 75 of the Consumer Credit Act.
Our guide explains this law in more detail, but in essence it says that your credit card provider is jointly responsible if the goods you purchase are faulty or if you don’t receive a promised service. The protection only kicks in on spending between £100 and £30,000.
Read more: Consumer rights UK: what you need to know
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Is a prepaid card better than cash?
Instead of a travel credit card, you could choose to keep your spending on a prepaid card. Some people prefer the latter option because it’s easier to manage their cash. Once the money is spent there’s no risk of running into debt.
It’s important to remember that prepaid travel cards aren’t covered by the Financial Services Compensation Scheme, which means that if your provider goes bust you can’t claim compensation for your losses.
Still, these cards must adhere to some regulation. The Financial Conduct Authority requires your e-money institution to ringfence this money within a regulated bank so that it can’t be lent out.
If you do want this protection, then consider another card such as Chase* which enables fee-free spending abroad. Our guide explains and lists other alternatives.
But when compared to cash, prepaid cards typically offer better rates – meaning you’ll get more for your money. Some people may wish to keep the bulk of their money on a prepaid card and have some cash on hand for emergencies.
The best and cheapest travel money providers
If you’re planning to take some foreign currency with you on holiday, you can order your travel money online or via a high-street lender.
To help you figure out who to use, we list some of the best and cheapest providers below:
One of its main perks is that it has several free-to-use tools which can help you monitor currency fluctuations and time your orders. This includes access to historical rates, a real time calculator, and an email updates system which notifies you when your chosen exchange rate drops below a certain threshold.
However, and unlike some of its competitors, Xe doesn’t deliver your money to your door. Instead, you can send it to one of its chosen locations for pick up.
It makes our list because it offers a price promise guarantee, which means if you find a cheaper retailer they’ll refund you the difference. In addition, Travelex can also deliver your cash to your door, with no fees paid on orders of £600 or more.
In total, the Post Office sells over 60 different currencies which all enjoy a 100% refund guarantee. This is an extra layer of protection which isn’t available via other providers. It allows you to revert your order at the same rate of exchange as your purchase if your trip is cancelled.
It’s worth noting that while M&S Bank is part of its Sparks rewards programme, you can’t earn any points on its foreign exchange.
Orders are commission free and if you want your notes delivered to your door you won’t be charged on anything over £500.
While most of this provider’s custom comes from dealing euros, it also deals in almost 60 other currencies.
How to get the best deals on a currency exchange
It’s almost always best to avoid using the bureau de change in the airport. By the time you get to the terminal, these providers know your options are limited and use this as a reason to increase their prices.
Last year Eurochange, a currency broker, released a survey which explored the difference in cost. It found that someone buying £1,000 worth of euros at three of the UK’s largest airports spends about £176 more than if they were to buy their currency through one of their high-street branches.
“These figures are striking and show how crucial it is for travellers to plan ahead when it comes to travel money,” said Charles Stewart, managing director at Eurochange.
Iain Donachie, head of money services at Tesco Bank, echoed this sentiment. He encouraged travellers to compare their options well before their departure – and if they come across a good deal they should take advantage of it.
“Plan ahead and buy your foreign currency online if you can, this is where you will find the best rates and give your spending money a little boost. It also means you will avoid receiving a poorer exchange rate at the airport,” he said.
When comparing your options, also consider checking your local supermarket for travel money offers and see if you can use your loyalty card to your advantage. Examples of loyalty schemes include Tesco’s Clubcard or Sainsbury’s Nectar card memberships, which sometimes can be used to gain better rates from their respective banks.
Read more: Tesco, Asda, Lidl and Sainsbury’s loyalty cards compared
FAQs
How long does it take to receive my money?
This depends on a variety of factors such as your provider, the demand of the currency, and how you’ll have it delivered. Some providers allow you to collect your order within 60 seconds, while others will deliver it to your door within three to five working days.
Will the money be delivered to me?
Travel money brokers are not the only ones who will deliver money to your home. In our listings above you can see which providers offer this service.
Can I use a credit card to buy foreign currency?
Buying foreign currency on a credit card is often considered as a cash advance, which incurs its own fees and daily interest charges. So, to keep things cheaper, it’s often recommended you buy your travel money through other means.
Will I have to pay a commission on my currency exchange?
Some brokers charge a commission to buy foreign currency. This usually works out as a percentage of your purchase. For example, one broker charges 0.7% commission on its foreign exchanges. If you bought £1,000 worth of euros this works out to a £7 fee.
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
