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Holidaymakers hit by high currency exchange rates

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21/05/2008

A weak pound against the euro and high airport currency exchange rates means Briton’s holiday money might not stretch as far as hoped, according to FairFX.

Holidaymakers flying from Luton, Newcastle, Liverpool, Leeds, and City airports could be paying well over the odds for their holiday money.

The prepaid currency card provider has discovered these airports are the most expensive UK departure points for buying foreign currency ahead of the half-term rush to sunnier climes.

Travellers planning to head abroad over the summer holidays could be paying as much as 11% more for foreign currency if they leave it until they get to the airport compared to organising beforehand.

Indeed, many travel money providers claim they offer travellers 0% commission but, as the FairFX.com analysis shows, this hides the true margins they add to wholesale currency rates when providing foreign exchange for travel purposes.

According to research conducted for FairFX.com by YouGov, three-quarters of travellers typically use cash when they spend abroad. Travel cash bought outside of the airport can also be overpriced. Most high street providers charge, on average, a 5% premium. The one in four Brits who favour plastic will also be paying a premium to use their cards abroad, usually around 3%.

Stephen Heath, chief executive of FairFX.com, said: “Since the second half of April the pound has gained over 2.5% against the euro and lost 2.5% against the dollar. Despite the pound’s current weakness, we will hopefully see some better rates for holidaymakers travelling to Europe in the next few weeks, but this is of little help to hard up Brits going away now.

“Most providers rely on the fact holidaymakers will be in a complete rush when preparing for a trip abroad, and either fail to organise currency before they get to the airport or opt to use costly credit or debit cards for their foreign spending. Our analysis shows to what extent this approach could be costing travellers dear. Whichever way you look at it UK travellers are losing out when they buy currency.”

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