How to get the best exchange rates when buying travel money

Where to buy foreign currency before you go

Exchanging your money can sometimes fall to the bottom of your to-do list when planning your holiday, and it can be tempting to leave getting your foreign currency until the last minute, but this doesn’t often give you the best deal.

Airports usually charge you more to exchange your money, so you won’t walk away with as much spending money as you would if you bought it elsewhere.

Instead, try your local Post Office, travel agent or a specialist currency exchange provider. It’s worth shopping around and comparing the exchange rates on offer before you buy.

What is the cheapest way to buy foreign currency?

Providers change their prices all the time to draw in customers, so it’s worth keeping an eye on a few different options.

The cheapest way is often online, due to companies having lower overheads, but bear in mind you’ll then need to pay delivery charges.

See which option gives you the best exchange rate, low commission fees, and low delivery costs - whether that’s online, in your local bureau, or via a high street store like Marks & Spencer.

Best credit cards to use abroad

Instead of taking pockets full of cash with you, consider using a travel credit card.

This isn’t a standard credit card, which could see you facing hefty charges for using it abroad, but one that’s specifically for using while on holiday. They either charge a small fee or none at all for transactions outside the UK.

They may give you a better rate than you’ll find exchanging your cash, but it’s still important to work out the total cost taking into account any interest, plus any fees, to see whether it’s the cheapest option for you.

It’s worth remembering that if you use a travel credit card abroad, you could spread the cost of any payments you make and any purchases over £100 will be protected by section 75 of the Consumer Credit Act.

Just be aware that if you’re withdrawing money at an ATM using your credit card while you’re abroad, you’ll likely be charged a fee for doing so.

A prepaid card could also be an option to think about. You top up your prepaid card with money before you leave, and then use it while you’re away. It’s possible to add more money to the card when you’re on holiday too.

When you load your card with money to spend, you’ll get the exchange rate on that day, rather than the day you actually use the card, so you’ll know exactly how much bang you’re getting for your buck. The exchange rate is set by the card provider, so it’s not always the most competitive, but it’s definitely worth a look.

Much like a debit or credit card, if you lose your prepaid card while you’re on your trip, you can call your provider and they’ll block it for you, so you know your money’s safe. You can exchange any money you haven’t spent back to pounds and transfer it to your bank account when you arrive in the UK.

Just keep in mind that some places might not accept prepaid cards, for example, a car hire firm, so you’ll need to do your research before you travel.