Cut the cost of money transfers
If you've ever had a family member or friend call you from abroad to ask for some money because they've run out, you'll know it can be costly to transfer cash out of the UK.
To transfer £500 online to somebody in Australia, well-known companies such as Western Union and Moneygram charge £37 and £36 respectively (almost 8%).
Your high-street bank would charge a similar fee. However, these fees can be reduced or avoided if you use alternative methods and know what to watch out for.
1. Sendmoneyhome.org is a website that compares different transfer services and helps you choose the best one for your needs. For example, the site ranks OrbitRemit.com/uk top for transferring £500 to Australia, with a fee of only £7.
Moneybookers.com is ranked second because, although it only charges 50p, the money can take up to three days to come through.
These deals are only available online. For phone transfer, Travelex Personal Payments is one of the top-ranked options, charging £10 for transferring £500 to Australia.
2. Be sure to look at the exchange rate you receive with each service and work out if it would be better value to pay a slightly higher transfer fee but receive a more competitive rate.
You can also look for additional information such as whether you can organise the transfer over the phone or in-branch.
3. For the fastest transfers you may want to consider setting up a PayPal or Neteller account, both of which only require an email address or mobile phone number to transfer the money, rather than a receiving bank account.
International payments from your bank account or from money held within your PayPal account will be charged at 3.9% of the total transaction plus 20p, up to a limit of £1,500. For sums larger than this, the transaction price gradually decreases.
PayPal transfers within the UK are free, while Neteller charges a 1.9% flat transfer fee, whether within the UK or abroad. So work out if you are likely to want to make domestic transfers in addition to overseas ones.
4. An alternative method is to take out a pre-paid currency card before your family member or friend goes away.
Many of these have a primary and secondary card, which means it's easy for you to top up the balance from the UK while your family member or friend can use the other card abroad. Again, comparison sites are useful when trying to decide which card to use.
Three good picks, however, are the FairFX currency card - which is currently doing an offer for Moneywise readers, the CaxtonFX Global Card, which can be used in multiple countries, and the Escape Travel Money Card from Phones4u, which costs £9.99 but after that has no additional charges for topping up or making transactions.