How to be smart when exchanging foreign currency
Brexit and its aftermath have thrown the currency market into chaos. Worst off though are the regular people who are unwittingly losing tons of money when they exchange their currency.
Figures show that 9 in 10 Brits will overspend on their holiday budget this year because of uncertainty about exchange rates or a lack of knowledge surrounding the current market fluctuations. Worryingly, the report found that 75% of people don’t check exchange rates before buying their travel money, 30% don’t know whether it’s better to use cash or credit cards abroad, and 75% don’t know what hidden commissions are.
As part of our mission to provide honest and helpful currency exchange services, we thought this was a subject that needed addressing.
So, what can you do to make the most of your pound in currency exchange, and to avoid unnecessarily wasting your money?
How to make the most of your pound in foreign currency exchange
By following these 6 simple tips when exchanging your currency, you will save money and avoid becoming one of the thousands losing money to fluctuating rates and confusion.
Shop around. Do your homework! Don't merely choose whatever seems the most convenient – such as your bank or the post office – but do some research online and find the place with the best rates. If you buy online, or somewhere on the high street, you could be quids in.
Always pay in the local currency when you’re abroad. One of the golden rules – and major mistakes – of currency exchange is choosing to pay in your currency, rather than the local one, in shops, restaurants and even ATMs, overseas. It may seem a strange logic but by choosing to pay in the local currency, you won’t be charged the (extortionate) currency fees determined by the local retailer or establishment. Places will naturally want you to pay in your own currency so they receive this exchange fee – make sure you check out how you are being charged if you’re not given a choice.
Avoid the airport at all costs. One of the biggest ways to lose a lot of money in the exchange rate is by converting your cash at the airport. Those who leave their currency exchange until the airport end up paying up to 10% more – no insignificant amount. Airports offer some of the highest rates around and they get away with it because so many people forget to exchange before they leave and have no other option. Don’t be that person! Get your currency in advance.
Check conversion rates regularly. With the uncertainty of the Brexit situation, exchange rates have been fluctuating frequently and quite significantly. This can notably impact the amount you get for your money. The best way to stay on top of these market fluctuations is to check rates regularly. You can do this either on the tool on our website (which we update with new rates on the hour) or by downloading our AIRGOFX mobile APP.
Bring more than one payment method. While we do recommend using cash, it’s good to have a couple of backups with you just in case. We suggest bringing a prepaid card, a credit/debit card and cash when you travel. It is best to avoid using the credit/debit card if possible, but do try to get one that has favourable overseas rates if you think you will need to use it regularly. For more information on the pros and cons of each payment method, check out one of our previous articles: Cash vs Credit Cards vs Currency Cards.
Get a prepaid travel card. Using a prepaid card means you can top up and lock in a rate when it's highest. And it’s all pretty simple: order your card, top-up and then use it abroad at an ATM. One of the main benefits of a prepaid card is that if your card gets stolen, you can block it very quickly. Plus, the damage is much more limited as you don’t have all of your money on there. The reason cash is still preferable to prepaid cards is that you may still have to pay ATM fees when using a prepaid card. By using cash, you only pay the exchange rate once.
Research has shown that Brits overpay more than 1 billion in foreign exchange rates every year due to hidden fees, rate mark-ups, commissions and transaction charges. We want our customers at ACE-FX to be fully aware of the exchange rate and how they can make the most from their pound. That’s why we have absolutely no hidden fees, transparency on our rates and give our customers a proud 8% more than the post office.
If you’re looking to buy or sell foreign currency, or simply want to check current exchange rates, head over to our website.
