Where and how your holiday money can go further
With summer in full swing and the pound hitting new highs against the US dollar, a whole host of new holiday destinations have opened up to budget-conscious Brits.
Sterling currently stands at more than £1.71 to every US dollar, making the States a bargain holiday. But even if the Florida sun doesn’t appeal, you can still take advantage of the strong pound.
Globally, 21 currencies are pegged to the US dollar, meaning that these governments move their exchange rates in line with American currency. As the pound’s strength against the dollar grows, Brits can take advantage of the strong exchange rate not just in the States, but in any of the countries where the dollar is influential in setting exchange rates.
These destinations include Dubai and Barbados, where the UAE dirham and the Barbadian dollar have weakened in line with US dollar.
Mark Horgan, CEO of Moneycorp, says: “The strength of the pound against the dollar works out in Brits’ favour in more than just the US. We are seeing the spending power of British holidaymakers and travellers visiting the country where the currency is pegged to the US dollar has increased – in fact their travel money will go 10 per cent further than this time last year. This considerable saving makes holiday destinations pegged to the US dollar an attractive prospect this summer.”
According to Moneycorp an eight dollar rum cocktail in Barbados would have cost £2.80 last year, while now it will cost just £2.45.
A night in the Burj Al-Arab hotel in Dubai, at 4,941 UAE dirhams, is £102.59 cheaper than a year ago.
Other destinations where Brits can find a deal include Hong Kong and the Caribbean, where the East Caribbean Dollar is currently trading at 4.43 to the pound.
How to get a good rate regardless of where you go
If you don’t want to pick your vacation spot based solely on how far your money will go, there are still ways to get great exchange rates.
1. Pick your cards carefully
When using a debit or credit card abroad, for example, the best value is to be found on cards specifically designed to be used abroad.
According to MoneySuperMarket.com Halifax’s Clarity Credit Card – which is free to use abroad – would charge £796 for €1,000 compared to the £838 charged by Barclaycard. This requires quite a bit of forward thinking, but that planning could pay off over time.
2. Think ahead
According to Moneycorp 36 per cent of Brits don’t think about purchasing travel money until a week or less before jetting off on holiday. This means missing out on the best exchange rates, particularly as going online can often score you significantly better exchange rates. When buying currency online you can schedule a home delivery or pre-order for collection at the airport, meaning much better rates with very little added inconvenience.
MoneySuperMarket found that ordering €1,000 for home delivery from FairFX would cost £807. Picking up the same amount from Gatwick airport with no prior notice – and thereby depending on the airport exchange rate – would cost £885.
3. Consider pre-paid cards
A prepaid currency card can be easily ordered online and could be a good alternative to cash. These cards allow you to withdraw cash without being hit with interest immediately as you would when using a credit card.
According to MoneySuperMarket FairFX’s Anywhere Card is the best buy for Euros and Dollars, while the Travelex Cash Passport is cheaper for those wanting to make cash withdrawals. Moneycorp’s Explorer Card allows adventurous travellers to load up to 14 currencies on one card.
Vanessa Schotes at Moneycorp says: “It really does pay off to order your currency a good few weeks before you go on holiday – it doesn’t take much time and means you can enjoy a good local meal with the money you save.”