Personal Finance: Broaden the wallet first, then the mind

Choosing the right time and the right place to change money can be of crucial importance to travelling enjoyably.

A TYPICAL family of four will spend pounds 1,000 on top of the cost of the holiday during a fortnight abroad. A backpacker on the other hand, might survive on pounds 100 a week all in. Either way, getting the best deal on their currency can make the difference of a meal out, or a trip they couldn't otherwise afford.

The best and worst deals we found on pounds 1,000 among the most reputable banks had a margin of more than 231 French francs. Find yourself in the hands of some money changing shark, and you won't come off that lightly.

But all the good news on the currency front may not last much longer, so the experts recommend anyone travelling abroad this summer should buy their currency as soon as possible. Travelex's finance director Clive Kahn said: "The pound will buy you 25 per cent more against most European currencies than two years ago. It's at the top of its range and unlikely to go much higher. It has already begun weakening against the dollar."

Another reason to buy sooner rather than later, is that some banks have limited commission- free offers. British Airways offers its customers commission free holiday money through Travelex. Thomas Cook has cut its normal currency charges by introducing a pounds 2 flat fee, and Marks & Spencer, has thrown off its woolly jumpers pulled on a bikini and is fighting its way, towel in hand, to the top of the best value tables, by combining commission-free trades with a very keen exchange rate.

And this is the key to getting the best deal for your spending money. Exchange rates, like commission rates differ from bank to bank, so you must consider these as well when deciding where to buy. But deciding whether to take travellers cheques, foreign currency or just rely on your credit card is the main stumbling block to early purchase of your holiday cash. The sensible traveller will take a spread of all these things with him.

Tourists are targets of organised criminals throughout the world, and being stranded without any money in a strange city, can ruin a holiday. Travellers cheques should bring greatest peace of mind, as they guarantee speedy replacement if they are stolen.

Most banks, building societies, the post office, travel agents and M&S will sell you travellers cheques usually for a typical commission of 1 to 3 per cent with a minimum of pounds 3. Smaller branches may need to order the currency, so it always pays to book ahead.

Also bear in mind you may need to pay an additional commission when you encash the cheques abroad, which tends to make them a slightly more expensive option than currency. American Express and Thomas Cook will cash them free at their own outlets.

Using a credit or debit card is another way to keep down the amount of cash carried. Remember your insurance policy is unlikely to cover more than pounds 250 or pounds 300 in cash anyway. Most banks levy a 1.5 per cent cash handling charge, which is topped up by an additional foreign usage loading of 2.75 per cent. This jacks up the charge to a hefty 4.25 per cent. But credit card companies use a favourable inter-bank exchange rate to bring the costs down.>

A few new cards, such as the Frizzell Bank Master/Visa card do not load the card at all, and Saga has a credit card which charges only 1.25 per cent on European currency conversions. However, once again this is only part of the picture. A poor exchange rate could wipe out any gains and the Frizzell Card levies an annual fee.

To find out which were the pick of the foreign exchange operators The Independent conducted its own survey of how much currency and travellers cheques one thousand pounds would buy from different organisations, with some interesting results.

The top dogs differed from country to country, but some seemed to offer consistently fair value. Thomas Cook's low flat charge combined with a sharp exchange rate made it the winner across most currencies, although it fared less well for travellers' cheques, where it still levies a commission of two per cent.

British Airways customers do pretty well out of its special deal, as do those at Marks & Spencer, although the foreign currency service is only available at major stores.

The Post Office offers a generally respectable service which outclasses most of the banks, and leaves Amex coming in about next in the pecking order.

The major banks tend to cluster together like a gaggle of plain girls at a disco. Their credit cards however did surprisingly well, ahead of the bank's travellers cheques and poorer currency deals. With Barclaycard, purchases of pounds 1,000 would convert to 9,536 French francs for example, and 9,676 francs with Midland. Barclaycard would buy 241,886 Spanish pesetas for the same sum and even more with Midland, at 243,961.

So, now you've sorted out the cash, and you are armed with some of the stunners of the currency parade, you can start planning your holiday romance.

Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
ebooksAn unforgettable anthology of contemporary reportage
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments