Guest article by Martyn James of free-to-use complaints website, Resolver
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. And of course, the one question everyone is asking us is ‘when is the best time to buy currency?’
When should you buy?
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 your holiday money. But with currency traders currently expecting more falls in the pound – and a potential Hallowe’en horror story for Sterling, you may have to use your money more frugally when you go away.
Buy now or later?
Many people choose 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, such as TravelMoney on the MoneySavingExpert website.
- Don’t buy currency at the airport. You’re a captive audience there and the rates are often terrible. At the moment it’s below 0.85 euros now for the pound. I die inside when I see an airport exchange where the pound is 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 may be stuck with little choice once you’re in a foreign country.
- Don’t use your credit or debit 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. That means it’s almost impossible to know how much that $100 you spent has actually cost you until much later.
- Watch out for fees if you’re transferring money. 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.
- Look for 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.
- Western Union or MoneyGram can be useful to send funds abroad. But watch out! They’re also one of the favourite tools of fraudsters, so never pay someone you don’t know for goods or services by making this kind of transfer. Once you’ve sent it, you may not hear from them again.
- 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!
MARTYN SAYS: If you’re not happy with the way you’ve been treated when buying holiday money, or you’ve been ripped off, you can make a complaint free of charge at Resolver and let me know your stories at firstname.lastname@example.org.
SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.