Whether it’s euros, dollars, colons or even your dong – the pounds fragility, made worse by post-election uncertainty, means heading abroad this summer is likely to be expensive. With £1 buying you less than a euro at some of the worst bureau de change, it’s never been more important to maximise every penny. So our money Saving Expert Martin Lewis is here to get you more bang for your buck…
Q. Should we be buying currency now or waiting?
If you're nervous, hedge your bets. Currency moves are complex and anyone who says they know what'll happen is a liar. I certainly don't. So don’t focus on trying to second guess the market.
Yet if you're worried, buy roughly half the currency you need at today's best rate, so you lock that in. Then buy the rest at the best rate when you travel. And if you're really nervous, ask yourself,"Would I be content with today's rate?" If so and your real fear is rates plummeting, making your holiday unaffordable, play safe and buy more now.
Q. So how do you get the best rates when you travel?
There’s a way to get near-perfect rates EVERY time you spend, on every trip. And this is what I do, I just spend on my specialist overseas credit card every time I’m away, which gives top rates as I spend. While most plastic adds a 3% 'non-sterling exchange fee' abroad, so £100 of euros costs you £103 (and often other fees too), these specialist cards give you the same near-perfect rates banks get. So apply now, use it to spend on every trip abroad, and just ensure you repay IN FULL each month – so there’s no interest.
There are around 10 of these cards, and as they’re credit cards you’ll need to pass a credit score to get one. But don’t just apply in hope, use Martin’s ‘Travel credit cards eligibility calculator’ to find which of these you’re most likely to get accepted for first.
My top pick is the Halifax Clarity card which gives near-perfect rates everywhere and has low ATM costs. Plus, apply now and spend abroad on it by the end of September and you get £20 cashback, though do pay in full otherwise it’s 18.9% rep APR. There are also similar cards from Barclaycard, Creation Everyday and others.
It’s worth noting, withdraw cash and you will usually pay interest even if you repay in full. It’s not too much, and it’s still better than most bureau de change – yet it does mean it’s far better to spend on the card than withdraw cash and spend that.
Alternatively, anyone (though it will ID check) can get a Monzo prepaid card as it doesn't credit-check you. Unusually, there’re no fees and gives you near-perfect rates (likely as a loss leader) when you spend on it. You have to operate it via an app though, and there's a short waiting list of a round a week to get it.
Q. What about the best way to lock in a rate now?
For this the easy way is to use a prepaid card. Unlike credit cards which require you to pass a credit check, anyone over 18 can get a prepaid card. They’re a bit like electronic travellers cheques. You usually load them with cash, locking in a rate on that day, then spend on them later.
The top picks due to low fees and best exchange rates is Revolut for euros, dollars, zlotys and Swiss francs, and WeSwap for a wider range of currencies. Both of those require apps, if not FairFX and Travelex are decent.
Q. Some people prefer good, cold hard cash – how do you do that?
Never wait until you get to the airport, rates there are hideous. And ignore such marketing spiel as ‘commission free’ that just means they load the cost into the exchange rate. Instead just compare by simply asking how many dollars, euros or whatever you’ll get for your cash after all fees. There are free comparison sites online which help do this. To show the range, I found 1,000 Turkish lira cost between £230 to £270 depending on the bureau.
Q. And if people want to ask you questions on this, or more holiday tips?
Tuesday night on ITV I’ve a 1 hour live holiday money special, where people can get in touch and ask questions. I’ll also be covering UK deals, overseas car hire, roaming, travel insurance and lots more. If you’re going away watch it and you could save large.