Consuming Issues: Don't be left short-exchanged on foreign currency

So, you're withdrawing a wad of notes from the cashpoint machine, when someone snatches the last £50 note. You may chase after them. Or call the police.

Why should you take any less care when getting foreign currency? According to the Post Office, the average Briton changes £529 for a summer holiday. Poor exchange rates and credit card charges could snaffle almost £50 of that.

Following a few tips will make more of your holiday kitty: order currency online and collect it, and beware that credit cards can skim 5 per cent off transactions.

First, changing your money. On a recent trip to Europe, I was surprised at the claim made by a friend that the biggest airport money-changer, Travelex, was good value. It isn't, though more competitive rates are available from its website.

Generally, ordering online and collecting currency in person is much cheaper than handing over a tranche of money at the airport, or elsewhere, on the basis of my research last week on changing £500 for euros.

The best rate was 575 euros at two small bureaux de change, Best Exchange and Thomas Exchange, which have a few outlets in London.

With 300 kiosks around the country, No1 Currency offered 566 euros and, in an impressive exception to the online rule, paid the same rate for impromptu visits to its branches, many of which are in other shops.

The Post Office offered 564 euros for collection of online orders, and, for unannounced visitors to 8,700 branches, 542 euros (about £20 less).

Next best was Marks & Spencer, which offered 553 (although you have to have an M&S card to order).

For online orders, Travelex paid 563 euros but, with no advance order, Travelex at Heathrow T4 paid just 530 euros, hitting travellers with an unimpressive exchange rate and 1.5 per cent commission.

A summary? The difference between the cheapest London bureau (575 euros) and Travelex Heathrow (530 euros) was 45 euros, or £40 – enough for a good meal out abroad.

Plastic can be handy for foreign trips, especially if you want to limit the amount of cash you are carrying to avoid theft or loss (although that risk can be diminished by storing some in luggage and some on your person).

Credit cards – though not debit cards – also give protection for faulty purchases costing more than £100.

But beware of hefty credit card charges, which are especially steep when you withdraw cash. According to banking experts Defaqto, the average credit card charges a 2.8 per cent foreign exchange fee for purchases abroad – more than £5 for every £200 slapped on plastic.

Cash withdrawals are even more expensive, attracting the 2.8 per cent foreign exchange fee and an extra cash-withdrawal charge averaging 2.76 per cent. This means that if you are withdrawing the equivalent of £200 in cash, the bank will pocket £10.

Some credit cards are significantly cheaper. The Post Office credit card and the Santander Zero credit card from Abbey (whose record on customer service is chequered) both have 0 per cent exchange fees for foreign purchases.

The Nationwide Building Society gold credit card and Saga's Platinum card waive fees for purchases on mainland Europe, but charge, respectively, 0.84 per cent and 1 per cent for other foreign transactions.

Debit cards are cheaper than most credit cards, while still being widely accepted overseas. The FairFX prepayment debit card can be pre-loaded for trips and has no commission and good exchange rates (£500 bought 576 euros, the best deal of all).

Current-account debit cards charge an average 2.2 per cent foreign exchange fee per transaction.

One other tip: Defaqto's banking analyst David Black advises against accepting a foreign retailer's offer to pay for goods in sterling: the exchange rate will be worse and the purchase will end up costing more. After all, there's no point funnelling money to financial providers when it could be used for your fun.

m.hickman@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Life and Style
techCould new invention save millions in healthcare bills?
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    C#.NET Server Side Developer (C#, XML, WCF, Unit Testing,SQL)

    £30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...

    Junior Database developer (SQL, T-SQL, Excel, SSRS)

    £20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...

    Business Analyst - Banking - London - £550 - £650

    £550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...

    Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

    £55000 per annum: Harrington Starr: A financial software vendor at the forefro...

    Day In a Page

    All this talk of an ‘apocalyptic’ threat is simply childish

    Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

    Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
    Mafia Dons: is the Camorra in control of the Granite City?

    Mafia Dons: is the Camorra in control of the Granite City?

    So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
    Emmys look set to overhaul the Oscars as Hollywood’s prize draw

    Emmys look set to overhaul the Oscars as Hollywood’s prize draw

    Once the poor relation, the awards show now has the top stars and boasts the best drama
    French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

    French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

    The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
    Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

    Radio 1’s new top ten

    The ‘vloggers’ signed up to find twentysomething audience
    David Abraham: Big ideas for the small screen

    David Abraham: Big ideas for the small screen

    A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
    Tim Howard: I’m an old dog. I don’t get too excited

    Tim Howard: I’m an old dog. I don’t get too excited

    The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
    Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

    Tom Peck on Match of the Day at 50

    The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition
    Air strikes? Talk of God? Obama is following the jihadists’ script

    Air strikes? Talk of God? Obama is following the jihadists’ script

    The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
    Ebola outbreak: Billy Graham’s son declares righteous war on the virus

    Billy Graham’s son declares righteous war on Ebola

    A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
    Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

    Not even Jeremy Clarkson is bigger than the BBC, says TV boss

    Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
    Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

    Nick Clegg the movie

    Channel 4 to air Coalition drama showing Lib Dem leader's rise
    Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

    Philip Larkin: What will survive of him?

    Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
    Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

    Waxing lyrical

    Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
    Texas forensic astronomer finally pinpoints the exact birth of impressionism

    Revealed (to the minute)

    The precise time when impressionism was born