Cut the price of your holidays and city-breaks: Four tips to getting the best exchange rates
Even young workers saving hard for a home deposit will probably be jetting off abroad at some point this year - whether it's for a holiday with friends, a solo adventure or a city-break.
We all want to make our money go as far as possible - so here are some tips for maximising your holiday spends by getting the best possible exchange rates. You can save a significant percentage by following these steps.
1 Choose a cheap destination to start with
Thanks largely to a looming Brexit, the pound is weak at the moment against its main trading partners the eurozone and the United States.
The pound gets a lot fewer euros than it did a couple of years ago, so unfortunately those city-breaks to the continent are coming at a cost.
So consider Turkey instead? Recent financial difficulties facing the country mean that the lira has plunged against the pound. Holidaymakers exchanging £500 at the Post Office this week received 4,091 lira compared with the 2,174 lira they would have got a year ago. No one is gloating over a country's unfortunate financial difficulties - indeed by visiting there, you'll be doing the local economy a favour.
For long-haul, South Africa is an excellent value destination at the moment with the pound buying nearly 19 rand - historically a very high exchange rate.
2 Get your foreign currency as cheaply as possible
Airport forex bureaux are the worst and high street ones aren't that much better. But there is a new breed of independent forex bureaux on the high street that offer far superior rates, and some offer home delivery of currency.
Also consider ordering currency in advance and picking up from the airport - the rates are far better. There's an invaluable tool on the MoneySavingExpert website that can tell you straight away where you can get the most of your sterling: travelmoney.moneysavingexpert.com.
3 Get the best travel credit card
You will be charged fees for almost all debit and credit cards abroad, whether you are using them to pay a retailer or to withdraw cash. And most will load the exchange rate too, so you are getting shortchanged.
But there are some exceptions. The Halifax Clarity Card charges no fees for either transactions or withdrawals, and gives you a good exchange rate (not far from the market rate).
As with all credit card spending, make sure you can pay off in full within one month (or you will be paying interest on the balance). And cash withdrawals will attract interest immediately - but if you pay it off as soon as you get home, this could be negligible.
Barclaycard Platinum and Tandem credit cards are also worth considering. As for debit cards, Starling Bank is the only bank that offers unlimited fee-free foreign spending and cash withdrawals. Starling's current account also pays 0.5% interest on balances under £2,000.
4 Never choose 'pounds'!
Many overseas ATMs shops and hotels will ask whether you want to pay in the local currency or sterling. The rule is simple - always choose the local currency.
Otherwise the retailer will use their own exchange rate which will almost certainly be a lot worse than the one your bank or credit card provider will use. Especially if you have followed tip 3.
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