How to change your holiday money
There are a variety of ways to change your holiday money. Moneywise TV gives you the lowdown on the different options and on how to keep costs down whichever method you choose.
Knowing which is the most cost efficient way to change your holiday money can be a minefield. Moneywise is here to help, taking you through the different options, we explain what you need to do.
Loading money onto pre-paid cards is a safe and easy way to take money overseas.
To apply complete an online application. It takes a few minutes and you should receive the card in a week or so. Activate the card by logging into the cardholder area and loading a minimum amount – usually £100. You don't need to do this until you are just about to travel. Look for a card that doesn't charge loading fees. Use compareprepaid.co.uk to compare available currencies, transaction and application fees.
Travellers' cheques are safe and easy to use – but cashing them in at your destination might be a hassle.
Check exchange rates before buying – offers that don't charge commission may well be subsidised by a poor rate.
You can compare deals online in moneysupermarket's travel section. Each time you cash a cheque abroad you'll be charged a few pounds for doing so. Take cheques in large amounts to avoid this extra charge.
Keep note of cheque numbers in case of theft to get your money back.
Holidaymakers are increasingly relying on their debit or credit cards. To prevent your card being blocked by your bank for suspected fraudulent activity, inform your bank of your travel plans. Sadly it doesn't guarantee your card won't be blocked but it's still worth doing.
Just as withdrawing cash on your credit card is expensive in the UK, the same rule applies when abroad. Some cards waive the withdrawal fee but you'll still pay a higher APR on cash withdrawals, so this is best avoided.
When taking out cash with a debit card, take out big amounts to avoid the card usage fee. This is usually about 3% but Nationwide and Santander accountholders don't have to pay anything within the eurozone.
Also be aware of dynamic currency conversion. This is when a retailer asks if you'd prefer to be charged in sterling instead of the local currency. Although it appears convenient, you're charged for the conversion from local to sterling and back again
Again don't be fooled by 0% commission claims. The only way to truly compare different exchanges rates is to see how much each provider will give you for your money. Also be wary of minimum fees, which make it difficult to change small amounts of money. If you're changing a bigger sum, flat fees could work to your advantage. Check with your own bank to see if they offer you, as an existing customer, a better deal. Otherwise online exchange services tend to give the best rates.
How you change your holiday money will be about convenience as much as cost. We recommend that you use a mixture of methods so you're prepared for every eventuality.