How to make £20 on your holiday money
Holidaymakers are being urged to shop around for the best possible currency exchange rate as it emerged they could be at least £20 better off when swapping £500 for euros.
Financial research group Consumer Intelligence said people who change £500 for euros with Moneycorp will receive €690.90, but the same amount of cash swapped for euros with Halifax would see them getting just €662.06 - a £20.53 difference at today's exchange rate.
However, Consumer Intelligence (CI) says a good exchange rate isn't the be all and end all for holidaymakers, as the three most popular places to buy currency - Post Office, Travelex and Tesco - do not offer the best rates.
The Post Office is the most popular provider, yet is only 12th for value in CI's exchange rate analysis - paying €10.90 less than Moneycorp when converting £500.
Conversely, Moneycorp, which offers the best value, is ranked ninth for popularity. FairFx, which is second-best for value comes one place higher than Moneycorp at eighth in the popularity contest, while third-place for value was Ramsdens - which swaps £500 for €689 - which is a lowly 19th place for popularity.
The top three currency companies for value are less well known to the public and Consumer Intelligence found that Moneycorp's lack of high street presence may put customers off.
The company does, however, operate bureaux de change in Central London as well as airports including Bristol Airport, Gatwick, Stansted, Southampton and Southend Airports and it operates a free next-day home delivery service on orders of £500 or more.
Ian Hughes, chief executive of Consumer Intelligence, said: "We need to shop around for travel money just as much as we do for car insurance or mortgages or we will lose out. People think that the price of a euro is fixed, it isn't - different people sell it for different prices.
"The issue appears to be that many people like to buy travel money in a branch and get the cash in their hands rather than over the internet. Moneycorp provides an airport collection service but doesn't have the national coverage.
"It makes sense wherever possible however to look for the best rate. People who really do prefer branches should look at Asda, Tesco, Ramsdens or Thomas Cook. And if you insist on a bank then it should be HSBC."
Consumer Intelligence points out that some companies charge fees such as charges for paying by credit card (Moneycorp charge 1.95%).
Some firms charge for home delivery too. Moneycorp charges between £5 and £18.50 for amounts less than £500 depending on delivery time, while Money Shop charges £3.99, Thomson £2.95, Lloyds £4.50 and Halifax £5.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.