15 Jul 10 Currency Conversion Hacks You Need to Know Before Going Abroad
As the value of the pound suffers in the wake of Britain’s decision to leave the European Union, it’s more important than ever to make sure that you’re getting as much currency for your money as possible when you travel abroad.
Unfortunately, the weak value of the pounds means that we’re simply going to have to grin and bear it to a certain extent, but here are ten tips which you can use to try and soften the blow a little.
1. Get An Overseas Spending Card
If you use your everyday credit or debit card abroad, you’ll probably find yourself incurring around a 3% charge, but this can be avoided by getting yourself a credit card which doesn’t charge you when used abroad such as the Halifax Clarity.
Not only will you avoid the extra charges but you’ll also be safe in the knowledge that you’re getting the best possible exchange rate.
Make sure not to wait around, however, as you’ll need to apply for one of these at least three weeks before you jet off and also remember to pay balances off in full to avoid any nasty interest charges.
Of course, it goes without saying that you should avoid one of these if you have a poor credit rating and will struggle to fully pay them off within a month.
2. Take A Prepaid Card
Alternatively, you can simply buy preloaded cards such as Revolut before travelling and simply use it just like you would a normal debit card once you’re abroad.
One advantage of these is that if you happen to lose the card, your cash is protected, but bear in mind that the rate you get is the one on the day that you purchase, not when you use the card, so you could wind up getting a worse (or better!) deal.
Also be wary that some places may not accept this type of card, so a little cash might still be a good idea.
3. Link To A ‘Supercard’
Another option is to check out one of Travelex’s ‘Supercards,’ a hybrid card which you can get without a credit check.
It works by allowing you to link it your existing debit or credit card, then enabling you to spend abroad while being charged in pounds, giving you a near perfect conversion rate.
One thing to bear in mind however, is that it works via a smartphone app so you’ll need to make sure that you not only have a smartphone but that it’s always well charged!
While it does give you a better rate than you’d usually get using a card, it does charge you 2.99% for cash withdrawals so try to pay for things directly using the card itself.
4. Compare Rates
If you’d rather take cash with you than use a card, then just as with anything else, it pays to do your research.
Websites such as compareholidaymoney.com allow you to compare a huge range of bureaux so that you can find the best possible rates.
If you do find a good rate, it can be a good idea to take cash with you as you’ll be ‘locked in’ to that rate.
Just make sure that you pay for your currency using a debit, not credit, card as otherwise it’ll count as a cash withdrawal and you’ll be charged interest.
And of course, make sure to take good care of all that cash whilst travelling!
5. Order In Advance
Some bureaus allow you to order your currency in advance, lock in today’s exchange rate, then collect just before you leave.
This is great due to the fact that if the rate gets worse before you go then you won’t suffer, and if it gets better you can just cancel and buy at the better rate elsewhere.
However, since the Brexit vote, fewer bureaux are willing to do this but you should still be able to find a couple offering it as a facility.
As an example, at Tesco, you can still order your currency a week before you go and cancel up to 24 hours before leaving.
It’s a good way to protect yourself from any potential rate fluctuations and helps gives you a little extra peace of mind.
6. Avoid Debit Card Spending
One of the worst things you can do is to simply go out and use your everyday debit card when abroad. While some are ok, many of the major banks including Halifax, Lloyds, Santander and Natwest will all hit you with some hefty charges for using them abroad.
On top of the charge that they give you for drawing cash out, they can often also hit you with a fee of up to £1.50 each time you buy something; a nightmare when making lots of small purchases.
7. Search For Cheap Debit Cards
While on the whole, it is best to avoid using debit cards, if you’re willing to do your research you can find some pretty good deals (although you will have to go through the hassle of opening a new bank account).
One of the best options out there is the Norwich & Peterborough Building Society Gold Classic account.
This account is open to all and provides you with a card which you can use abroad at no cost.
8. Don’t Buy Currency At The Airport…
While it might seem simple, quick and easy to simply change your pounds at the airport before you leave, you really should avoid doing so unless you absolutely have to.
The rates at airport kiosks are always among the worst, as they know that at that point you’ve got no real other options.
9. …Or Exchange Abroad
Of course, you could just do the exchange once you reach your destination although you’re still going to have to search out the best possible rate and it can wind up being more hassle than it’s worth, taking up time which you should be spending enjoying yourself!
Always make sure you’re fully prepared and don’t get caught out!
10. Never Pay In Pounds
Cash machines and some vendors will ask you when making a transaction whether you wish to make it in pounds or in the local currency.
However, it very rarely pays to make the payment in pounds. This is due to the fact that the overseas vendor is making the conversion, usually at a less than favourable rate.
For a more in-depth look at the reasoning behind this, check out this blog from Martin Lewis of MoneySavingExpert.com.