How to make your travel money go further
As the summer holiday season hots up, foreign currency specialists, HiFX outline the top destinations to jet off to this summer and offer tips on how to get the most out of your travel money.
Mark Bodega, Director of currency specialists HiFX says, "The last thing people think about when booking a holiday is the strength of sterling against a country's currency, but it's now more important than ever to make the most of your money as Sterling's strength and volatility could have a real effect on the cost of your holiday."
Where to get the most value from your pound this summer...
Sterling remains relativity weak against the major currencies meaning most holiday makers will find trips abroad feel more expensive than they did a few years ago. However, if you're heading to Hungary, US or countries in the Eurozone at the moment, you'll get the best value for your pound relative to last year. Holiday makers who don't want to rely on sterling strength to make the most of their holiday money should consider destinations such as Turkey or South Africa, which are generally regarded as good value holiday hotspots regardless of exchange rates.
If you're looking to get the most from your pound, be aware that Sterling has fallen 15% against the Australian Dollar and 13% against the Japanese Yen since this time last year, making Australia and Japan feel extra expensive to Brits. Sweden, Norway and Switzerland will also feel pricier compared with the UK.
Making the most of your travel money
To help holiday makers avoid being beholden to sterling strength on holiday, HiFX has outlined some tips to help people make the most of their travel money:
1. Don't leave it to a last minute dash at the airport:
Traditionally buying currency at the airport will cost between 3-6% more than from a typical high street bureau de change or bank. It's always cheaper to purchase currency before you go, especially if you buy online, so you can not only take advantage of a better exchange rate, but also avoid commission charges. If you do purchase your travel money online, make sure you use a company who offers a secure online service, like HiFX.
2. Beware of hidden charges
Beware if you do decide to use your credit or debit card overseas, there are a number of costly hidden charges that you may incur such as:
Adding a 'load' on the exchange rate, so £100 of foreign currency actually costs you £103.
Cash withdrawal fees on both credit and debit cards up to 2.5% (or minimum £3).
Interest charges even if you pay off in full.
Some card providers even charge a penalty each time you spend.
Also bear in mind if you're also using a credit or debit card to buy currency from a bureau de change in the UK, as this isn't always treated as a UK transaction and may also be subject to cash withdrawal fees. For example, payment using a MasterCard credit card will incur a 1.5% handling fee of the order value.
3. Choose the best currency if you're travelling across multiple currency zones
Sterling, Euro and US dollars can be widely exchanged in most tourist destinations, compared to local or more exotic currencies, such as the Thai Baht. If going away for a long period or visiting a number of countries, HiFX advise that you exchange enough of the local currency for immediate purchases, such as taxis from the airport and then take Sterling, Euros or US dollars with you to exchange into relevant currencies needed during your travels. Travellers' cheques are also a safe alternative to cash as they can be refunded and/or replaced if lost or stolen.
4. Pay in advance to avoid surprise costs and currency fluctuations.
Pay for your trip in the UK in advance using a reputable ABTA travel agent (the Association of British Travel Agents) This means the cost of your holiday is fixed in sterling and can be paid at the outset rather than being subject to currency fluctuation in your destination country which could mean you end up paying more.
5. Plan a budget - and stick to it!
Calculate the Sterling amount you expect to spend each day; don't forget you could spend a lot more on holiday! Extra funds should be factored in for emergencies, delayed flights etc. Try to stick to this to avoid making expensive cash withdrawals abroad or being left with excess currency at the end of your holiday.
Remember banks and bureaux de changes will only change notes, so get rid of all loose change while you're away, or save it for your next trip! Alternatively, some airlines collect left over coins for charities during the flight.
6. Avoid trying to beat the markets
With Sterling so volatile, it's tempting to watch the markets to try and cash in on a good rate. However with smaller transactions such as travel money it's unlikely you'll get a lot more local currency by watching exchange rates. You are effectively gambling on what the exchange rate will do and by leaving ordering your travel money until the last minute you risk missing out on the good deals that are available from ordering money in advance online.
Mark Bodega, Director of currency specialists HiFX says "We all want to make the most of our holiday money and make sure we have enough cash on holiday to do everything we want to do. There's no quick win to guarantee this, but you'll be better off if you shop around for currency before leaving, use cards sparingly abroad and remember that cash from credit cards is costly. In the run up to a holiday, travel money is often the last item on your list, but if you wait until the last minute when you're at the airport to buy your currency, you could be charged a lot more and lose out on precious funds for treating yourself whilst you're away."