When sourcing the best travel currency deals, rates and offers can become confusing. Many providers will have minimum amounts and better rates which are offered on amounts of more than 1000 GBP. Other avenues to consider include the post office and banks, however, these tend to be expensive and commission rates at times can be excessive. Banks also focus very little on travel money exchange and therefore are less interested in providing ultra-competitive rates as they have a monopoly. Credit cards can be a convenient and safe way of travelling and funding a holiday, but will your charges be excessive? Here are a few points for consideration before purchasing currency or making travel plans.
Travel currency cards
Many specialist travel currency providers will often allow clients to select whether they would like their purchased currency in cash or placed on a travel currency card. This can be an excellent idea both from a practical and safety perspective. Ideally, you don’t want to be carrying all your currency when exploring off the beaten track or in obscure locations.
In these circumstances travel currency cards can be ideal. However, please confirm before departing how good the card’s coverage is in your location, that the card has a support line and where that’s based. The last thing you want is to be calling an outsourced card helpline when on holiday as you can’t access any of your money.
It’s also worth understanding their policy on fraud in case you are the victim of a card copier or a pickpocket.
Finally, many are to free cash withdrawals when overseas, however, this is always worth clarifying as if not it may be subject to the ATM’s discretion and these charges can add up.
Many well-known travel currency providers will offer an online currency reservation which allows you to select the airport or Bureau location of choice. Travel money providers will provide a rate beforehand and allow you to fix the rate for collection in the near future, which can be useful if the rate is volatile or you are holidaying on a budget!
They tend to stock the majority of major currencies, allowing you to order 1-2 days beforehand and collect just before you board your flight. Larger amounts may require the same ID and address proof as a typical Bureaux and exotic currencies might be worth booking 3-4 working days in advance to avoid any disappointment.
Airport collection travel money services tend to be very keenly priced and normally offer a considerable saving when compared to buying directly from the airport on the day you depart. You must, however, ensure that you pre-book or reserve for collection failure to do this will guarantee disappointment. Bureaux located in Airports typically command high rents and these rates can be reflected in the rates. In other cases, Airport owners may have a prewritten agreement that they benefit from transactional business and therefore receive a % on any profit generated by the Bureaux.
The Post office travel money offers
Post offices offer practicality when purchasing currency, they are often located in town centres and can be a convenient way to purchase currency. Rest assured you will pay for this convenience and typically Post-Office travel money rates will fall short of those offered by specialists and Bureaux’s in city centres. Their website will offer better rates and currency can be delivered to your door, however, delivery is subject to a minimum amount of GBP 400 and the maximum they will deliver is 2,500. However other currency delivery service can be more keenly priced and some will even deliver to your place of work. It’s always worth checking with your HR department. Occasionally companies will have a local company who deliver currency at a reasonable exchange rate.
Bureaux de change travel money deals
Bureaux de changes can be located in most major cities and typically offer interesting rates provided they aren’t located in airports or train stations. Bureaux can be an extremely competitive way of sourcing your travel money and rates will typically be more competitive than Banks, The Post Office and Credit or Debit cards. However, if the bureau you are planning to use is located in an airport or train station be sure to scrutinise the rates and potential charges in some cases the rate will be less competitive due to expensive rent and overheads or additional charges that might be added for the convenience of the airport or train stations location.
If you are looking at purchasing a significant amount of foreign currency Bureaux may request an address proof and take a copy of ID so make sure you have the relative documents if buying over a Bureaux travel money counter.
Credit and debit cards
Whilst we would always advise checking with your Credit Card or Debit card provider to be certain purchasing or financing your holiday on a card can in many cases be competitive and avoids the risk of carrying significant amounts of travel money.
Many credit or debit charges will charge approximately 3% on transfers, many have zero withdrawal fees and some even offer cash back on purchases. However, be certain to read the small print and know the card’s coverage particularly if you are travelling to an exotic or very rural location.
Bank travel currency rates
Banks will be able to assist with your travel currency needs however it is far from a focus for them. As with international money transfer services, a bank’s focus tends to be on accounts, insurance and other supplementary services.
High street banks typically will operate on a day rate, whereas specialist providers will work from a live rate. Meaning if the rate improves dramatically from when the day rate is set you won’t necessarily benefit. In many cases, you will also have to pre-book or order your currency beforehand which can take a few days. If the amount is substantial or you need an exotic currency this might take slightly longer. Banks tend to be very inflexible so will rarely haggle or allow negotiation on their rates.
Travel currency buy-back options
Many providers and even the post office run back schemes which allow you to sell back the currency. Typically, they allow you to sell the currency back at a pre-agreed rate meaning you won’t be left out of pocket if the rate moves dramatically. These buyback options can only a few pounds and give the ability to take more currency than you may need to offer peace of mind when abroad safe in the knowledge that you can sell back and supplementary travel currency left over from your trip. However, if you are only going for example on a long weekend and you are confident in using most of your currency or keeping any remaining money it might be worth skipping.
Can you negotiate or haggle on a travel currency deal?
In a word absolutely, many independent based travel currency dealers will have some flexibility on pricing particularly if you are looking at buying in excess of 1000 GBP or currency equivalent. City based Bureaux de changes will also deal in huge volumes of currency and tend to adopt a ‘Deal at any cost’ mentality therefore you can typically get a great exchange at popular branches.
Banks, however, will typically stick to day pricing and have a less flexibility on their pricing and simply put be less willing to offer reductions. Prices tend to be dictated by HQ and the cashier’s flexibility to improve the rate will be extremely limited or non-existent.
Airport located bureaux de changes will typically pay a portion of their profitability to the airport owner or holding company and can, therefore, be a very expensive way of purchasing your currency. However, some providers as mentioned above will offer the ability to pre-book and normally this enables the providers to offer much more competitive pricing. They will not however allow, you to negotiate further and the price agreed online is the price that you will receive when you collect your currency from the airport, train station or Bureaux de change.
Regulation of travel money providers
Incredibly Its fairly straight forward to start your own travel money company or Bureaux de change. An individual can register with HMRC and register as a ‘small payment institution’ and trade up to £2.4 million of currency a month.
So whenever dealing at distance ensure you make the correct amount checks especially if you are looking to exchange a significant amount of currency.
Ensure the company is listed on the FCA’s website and Companies House. Companies House (UK) will provide you with an image of the companies trading history and provide you with a list of directors and their turnover.
Your mind can also be put at ease by consulting consumer feedback website such as Feefo and Trust Pilot, if the provider has a high and consistent number of reviews than this will certainly help you to make your final decision.
Final check list to source your travel money provider
- How much currency will you need – if above £1000 make sure you haggle
- Do you want to carry a significant amount of cash or would a card be better?
- How much does your credit card provider charge? Could this be a better option?
- Does your elected Bureaux de Change or travel money provider have a good track record?
- Will you need a buy back option? If yes, do you feel the buyback scheme is competitive relative to the amount of currency you might wish to exchange on your return?
If you require assistance, do not hesitate to contact us on our international money transfers page.