How to get the best rate for your cash when you head off on holiday

Martin has good advice on how to get the best rate for your holiday money.
Martin has good advice on how to get the best rate for your holiday money.
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Have you got a case of the holi-wobbles? The pound is still in the doldrums and many holiday makers are too.

Yet two minutes now can let you relax when you’re abroad, knowing you’re getting the maximum bucks (or euros) for your bang.

The overseas holiday collywobbles are real. I recently ran a quick Twitter poll and more than 5,000 people responded.

12 per cent of those who intended to go abroad have given those plans up, and a further 35 per cent say they’ll go, but will be more careful with their spending.

So let me take you through everything you need to know…

Should I be buying my Euros or dollars now for summer?

A good question and one I don’t know the answer to. Anyone who tells you they know what’ll happen to currency rates is a liar.

Of course someone will say “buy now”, someone else will say “wait”, and a third person “the rates will stay the same”.

One of them will be right, and will say “I told you so”, but that doesn’t mean they knew. Personally I don’t bother, I ensure I get the best rates when I go.

Yet if you’re nervous, then you can hedge your bets. Buy roughly half what you need now, to lock it in, and then get the best rates when you travel.

For the rest of this article I’ll show you the best way to do those. Take two minutes to get near-perfect rates worldwide, every time you’re away.

The easy option is to get and spend on one of the specialist overseas credit card that you religiously pay off IN FULL every month (or you pay up to 20 per cent APR interest – in which case don’t do it).

This gives you the same near-perfect exchange rates the bank gets on the day you spend, in almost every country, time and time again, as unlike most debit and credit cards which add a 3 per cent ‘non-sterling exchange fee’, these don’t charge.

There are about eight of these cards; to see which one you’re most likely to be accepted for, use my overseas cards eligibility checker at mse.me/ travelcardcheck, which shows your acceptance odds for most of them.

If you’ve a decent chance of all of them, a Mastercard tends to give better rates than a Visa.

The top two of those are www.halifax.co.uk Clairty, which has long-term good feedback and low ATM withdrawal costs, and newer player www.creation.co.uk Everyday, whose ATM fees are a smidgeon cheaper.

It’s worth noting that it’s cheaper to spend on these cards than to withdraw cash and spend that; as you may pay interest on cash withdrawals (not spending) even if you fully clear the card. Yet even then they beat most bureaux de change.

Top prepaid cards give you today’s top rate, and are easy to get. Prepaid cards have no credit check, so anyone can get them.

Plus, unlike credit cards, where you get the rate on the day you spend, with these cards you usually pre-load them with cash before you travel at that day’s rate.

So it’s a good way to bag a rate now for spending later.

Of course, if the pound strengthens by the time you holiday you lose, if it weakens you gain.

For the analysis and more options see www.mse.me/ prepaidtravel.

Need cash? Compare rates from 30+ bureaux. If you want cash, of course you get the rate on the day you pay.

Ignore any flannel like ‘commission free’ what you want to know is – if I give you £500, how many euros will you give me after all charges? And that’s the way to compare.

You can do this online via my www.travelmoneymax.com site, which compares about 30 online bureaux.

It also shows you quite how extortionate it is to change money at airports or ferry stations.

If you must do that, at least pre-order for pick up, as you get a better deal.

And beware paying for currency at UK bureaus by credit cards, it counts as a cash withdrawal, so there’s a fee and interest even if you fully repay – so best to pay with a debit card, or cash.

* Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 12 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com