How to get more for your holiday money
Holidaymakers jetting off abroad this summer will find they get a lot less for their Sterling than previously. Since June 2016, the pound has lost about 15 per cent of its value against the euro and 14 per cent against the dollar.
But planning your holiday money before you travel can go some way to make up for the pound’s poor performance. The longer you have until you travel, the more choice you have, and the better rate you can get.
According to analysis by Hargreaves Lansdown, if you plan a couple of weeks in advance, you could get more than 39 per cent more Euros than if you exchange your money at the airport. Even if you only plan one day in advance, you can order your cash for collection and improve your rate by 36 per cent.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “For the past few years, crippling holiday inflation has become as much a part of the annual getaway as overdoing it at the buffet or regretting your decision to try the local liqueur.
“But you don’t have to subject yourself to the pain of rising holiday costs – or cutting out all the fun extras on your break – because by shopping around, you can get more than a third more than you do at the airport, which more than offsets the effect of the falling value of the pound.”
How many Euros will you get for £700?
Hargreaves Lansdown calculated how many Euros you’d get for £700 for different types of foreign exchange deal (rates are correct as of 2 July 2019).
Halifax Clarity will give you €779.62 for £700. The Clarity card has is fee-free for both purchases and ATM withdrawals overseas.
Halifax is currently offering £20 cashback on your first spend if you get the card before the end of August and spend on it within 90 days.
However, if you fail to pay your credit card bill in full and on time, you’ll pay interest. ATM withdrawals are fee-free but you’ll pay interest from day one. Withdrawing cash on your credit card is rarely a good idea – it will show on your credit report and could work against you if you need to apply for credit.
If you’re happy with a credit card from an online bank, Tandem has a very similar offering to Halifax, with the additional benefit of 0.5 per cent cashback.
Starling Bank’s debit card will also give you €779.62 for £700. This is a competitive exchange rate and there are no fees for spending or use overseas
You’ll need to open a Starling current account, but there’s no minimum monthly payment or direct debits, and you can hold it alongside your main account. Most other debit cards charge fees for overseas use – so don’t assume all debit cards are the same.
Ordering cash online for delivery
Debenhams will give you €773.01for £700. It offers free delivery on orders of £500 and over.
Buying cash upfront gives you the chance to lock in a competitive exchange rate. If you want to spread the risk of ordering all your cash at the worst possible time you can also change some as soon as possible, and some closer to the date you plan to travel.
However, there are security issues with carrying a lot of cash on holiday, and most companies have delivery charges if you order smaller sums. There’s a small risk you’ll lose your money if the bureau goes bust in between you placing your order and it being delivered.
Advance order for airport collection
Moneycorp offers €763.91for £700 if you book online and pick up your cash at the airport.
Ordering cash in advance and collecting it at the airport also gives you the opportunity to lock in a decent exchange rate, and you don’t have to worry about delivery charges. The bureau exchanges your money on the spot, removing the risk it will go bust while holding your money.
However, if you order in advance and pick up your cash in person, you’re limited to the companies operating at the airport you’re flying from, which in some cases means a less competitive rate.
Airport walk-up rates
Waiting until you get to the airport to arrange your foreign currency will cost you dear. You’ll get just €560 for £700 from Moneycorp at Stansted.
If all else fails, go to Turkey
While the pound has fallen against some currencies, it hasn’t had such a difficult time as the Turkish lira: since June 2016, the lira’s woes means you’ll now get 80 per cent more for your pounds. Even since this time last year the pound is 17 per cent up against the lira, so if you pick a destination in Turkey, you could actually be better off than in previous summers.