Shopping around for travel money makes good cents

People looking to get a good deal despite the weak pound could make considerable savings by buying foreign currency from city-centre bureaux de change or online, rather than from the airport, travel agents and banks, says Which? Money.

The consumer watchdog checked exchange rates when buying US $500 and €500 in cash at 21 currency providers - including banks, bureaux de change, travel agents, the high street and online - on six different dates. It found costs varied by almost £50 between the least expensive and the most expensive providers.

The cheapest currency provider on average for US dollars and euros was Eurochange - it charged £351 for $500 and £461 for €500.

The most expensive quotes were from an airport branch of Travelex, charging £40 more for $500 and £47 more for €500, on average.

Airport bureaux de change such as TTT, American Express and Travelex provided the worst value for money, as they tended to charge for commission.

The Post Office offered good deals for people buying currency online, but not for those buying from a branch.

Which? Money also found that using the wrong card for spending could be costly, as most card transactions abroad incur a ‘foreign exchange loading fee' - typically between 2.75 per cent and 3 per cent - as well as a withdrawal fee for taking out cash.

Martyn Hocking, editor, Which? Money, says: "The fall in the value of the pound has increased the cost of hotels, travel and entertainment for UK tourists, so it's more important than ever to shop around for currency. Don't just presume that high-street providers such as travel agents and the Post Office offer the best deals. Thinking ahead and changing your money before you travel means you'll avoid getting stung at the airport - head to a city centre bureau de change or go online for the best deals".

Which? Money offers people heading on holiday the following advice:

Shop around for your travel insurance - there are some great deals available that could see you make significant savings

Tell your card provider when and where you're going, or it may block transactions on your card

Don't use your credit card in a cash machine unless it's absolutely necessary - the charges are often high

Pay for currency in cash or on a Maestro card - that way you don't pay the additional charges levied on Visa, MasterCard or Amex cards

Don't forget that sterling traveller's cheques often impose a 1 per cent to 1.5 per cent commission charge

Use a Best Buy credit card from The Post Office, Nationwide and Saga, which don't charge for transactions in the EU, or a Nationwide debit card.