Need a holiday? You’re not alone. But prepare yourself – because your pound isn’t going very far these days.
With nervousness about politics and Brexit leading the headlines, the pound is plummeting. Of course, the one question everyone is asking us is ‘when is the best time to buy currency?’
We can only really recommend watching the news and choosing your moment. When there’s optimism about the current situation, then it might (might being the key word here) be time to buy currency. But with traders currently expecting more falls in the pound – and a potential Hallowe’en horror story for Stirling, be prepared to used your money more frugally when you go away.
Many people chose to buy some of their holiday cash now, banking on the fact that if the pound drops lower, they’ve still managed to get a slightly better rate for some of their cash. But all we can say is keep informed, listen to the experts and bear in mind this is a rocky road.
Here are a few tips to help you avoid getting caught out by a rubbish rate.
- It’s an urban myth that there’s one single exchange rate that fluctuates throughout the day. Actually, there’s a huge variation in the rates you’ll be offered for travel money, with the high street and the banks among the worst. Check out a free currency rate comparison online, MoneySavingExpert have one on their website.
- Don’t buy currency at the airport. You’re a captive audience there and the rates are often terrible – literally below 0.85 Euros now for the pound. I die inside when I see an airport exchange where the pound was slightly less than the Euro but prepare yourself because that’s what you’ll get. It’s another urban myth that you ‘get better rates when you buy abroad’ – I hear this one all the time, but it’s simply not the case and you’re stuck with little choice once you’re in a foreign country.
- Don’t use your card abroad if you can help it. Most banks and card providers will hit you with a 3% charge for each overseas transaction you make. But the big con is they set the exchange rate you are charged, which means it’s almost impossible to know how much that $100 you took out has actually cost you until much later.
- The same goes for transfers abroad. Banks often have high fees for transferring money – and some people have lost huge amounts by not paying to fix an agreed rate of money on a big transfer. Always fix the rate if you’re sending a large sum of money, for example, if you’re buying a property abroad.
- There are some specialist cards for spending abroad, you can find them by shopping around online. Look for fees and exchange rate information before signing up. You might also want to consider a pre-paid currency card, available from most exchange service providers. This saves you carrying around lots of money – but check how widely they’re accepted before signing up.
- Lots of people use services like Western Union or MoneyGram to send funds abroad. These services can be useful, but they’re also the favourite tools of fraudsters, so never pay for goods or services to strangers by making this kind of transfer. Once you’ve sent it, you won’t see it again.
- And one old ‘trusty but true’ tip for holiday makers. If you’re going away, don’t just have one source of money. If your cash gets pinched, then don’t be stranded because your cards were in the same wallet. Keep your money separate, have an emergency credit card, just in case there’s a serious problem and set a daily budget so you’re not carrying around a wad of notes to tempt pickpockets with!
Dodgy exchange rates have been a cash machine for banks and businesses for too long in my opinion. They can cost each of us thousands over our lifetime. So Resolver has teamed up with TransferWise to launch a campaign to fight unfair overseas fees. Find out how much you’ve been overcharged with the free app then we’ll help you make a complaint too.
Find out how much you’ve been overcharged for overseas fees at https://www.fightoverseasfees.org.