Get value for foreign currency this summer

Share This:

• 

Text size: A A A

By Luke Jovetic
Know Your Money Editor

With a number of Britons likely to be jetting off around the world in the coming months to take a summer break, it could be wise to consider ways to gain the best possible value for money.

And if the latest statistics from the UK Cards Association are anything to go by then a number of people may benefit from considering their money options before travelling.

It found that overseas transactions on UK-issued cards amounted to just under three per cent of all card transactions last year, with 303 million separate purchases and cash withdrawals.

In addition to this, £17.7 billion was spent by Brits abroad on credit and debit card purchases and £7.8 billion was withdrawn from cash machines.

Research from sunshine.co.uk recently revealed almost two thirds - 64 per cent - of Brits are confused by foreign currency.

This has led to 51 per cent spending more on holiday as a result of their confusion, as they paid more than they normally would in the UK for items.

Also, 12 per cent of respondents thought the currency in Spain was still the peseta, while 30 per cent said they thought the French still used francs.

Be prepared

With the vast amount of money being spent abroad money-savvy travellers could wish to ensure they plan ahead and sort out their holiday finances before the day of departure.

The relatively weak nature of the pound might make it wise to shop around for the best deal before going abroad and at all costs avoid exchanging money at the airport.

Consumers have a range of options when exchanging money and the best deal may vary depending on their individual needs.

Supermarket group Sainsbury's has recently unveiled plans to double its share of the travel money market within the coming three years, so there should be little reason for Brits to get their holiday money just before boarding a plane.

Kevin Mountford, head of banking at moneysupermarket.com, said: "For those looking to get their hands on some foreign currency before they travel, it's worth remembering that they'll rarely get the best deal at the airport. Instead consumers should shop around beforehand to ensure they're getting a competitive rate and not getting stung with high commission fees.

"The market leading prepaid cards from FairFX or CaxtonFX have no purchase, withdrawal or foreign loading fees and can be topped up online or over the phone for free with a debit card. Consumers can stick to their budget and use the card as often as they want, without worrying about racking up huge charges."

He added consumers clever enough to plan ahead and ensure they have the right plastic abroad can save "a pretty penny".

Those who would rather not take out specialist prepaid cards will find there are regular products available that offer free withdrawals and purchases abroad.

For example, the Nationwide or Santander current accounts have no charges for card usage in the European Visa Region.

The UK Card Association offers the following advice to those taking cards on holiday with them:

Only take cards with you that you intend to use; leave others in a secure place at home.

Make sure you have your card company's 24-hour contact telephone number.

Ensure sure your card company has up-to-date contact details for you, including a mobile telephone number.

And, as ever, card users should be vigilant about letting the card out of their site, not telling their Pin number to anyone regardless of who they say they are and covering their code when typing it into a machine.

What the experts say

A sensible choice for Brits looking to get a preferable rate of foreign exchange could be to use the Post Office.

And according to the its Travel Money Monitor, buoyant sales of leading holiday currencies in March suggest that consumer confidence has been returning in recent months.

It reported year-on-year growth in March for all ten of its leading currencies.

Sarah Munro, head of Post Office Travel Services, said: "One of the main reasons consumers are confused over currency is because they are often unsure which countries belong to the eurozone and which do not."

She suggested those looking to make the most of their money should do as much research as possible before travelling, looking at exchange rate movements and taking into account destinations where living costs are lower.

In her opinion Brits could be able to achieve good value for money in ever-popular destinations such as Portugal or Spain due to the improving exchange rate combined with the low cost of living.

Important Notice
This guide is intended for general information only and is not intended as, and does not constitute, any form of advice, recommendation or endorsement by us of any particular product(s) or services and you should rely on your own further research and professional advice in relation to your specific requirements and circumstances before purchasing any products or services. Use of this guide is subject to the Terms of Use of the KnowYourMoney site.