With so many different options out there, currency exchange can be expensive and confusing.
Getting the most bang for your buck is important to savvy travellers, looking to make their holiday money stretch further in an increasingly uncertain foreign exchange market.
Britons focused on having more fun in the sun, instead of losing money on expensive card transactions, should opt for a prepaid travel card if they want to get the best value for money when spending on holiday.
They’re simple and easy to use, working similarly to a prepaid gift card.
First, holidaymakers must upload money onto the card. Then they can spend the money as they wish, until the balance reaches zero before topping it up again.
This makes them an ideal choice for those wanting to stick to a budget, as you can’t overspend or go into an overdraft.
Preloaded cards are also beneficial because they lock in the current exchange rate, which protects travellers to any swings in volatile currency – important given economic forecasters have warned the pound’s value against the euro is “as good as it gets” for the rest of the year.
The most popular currencies are euros and US dollars, although other currencies such as Japanese yen and Australian dollars are also becoming more widely available.
As well as protecting against currency fluctuations, prepaid travel cards are cheaper to use abroad than a typical UK debit or credit card, which usually charge expensive usage fees for making purchases when on holiday.
However, cards such as FairFX and CaxtonFX, don’t charge when you make purchases abroad, and usually lock-in the best exchange rates. The only fee you are likely to face is that at the ATM.
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These plastic currency cards are also more secure than carrying cash, which can get lost or stolen when carrying around or leaving in the hotel room.
Much like a normal bank card, if it gets lost or stolen all you have to do is contact the provider who will block any further use on the card.
Some cards will even offer emergency cash if the worst-case scenario happens and you need money to tide you over until you’re back in the UK. However, you may required to pay for a replacement card.
According to consumer advice experts, Which?, the best cards include CaxtonFX, Escape Travel Money, My Travel Cash and Travelex because they impose limited charges.
But always read the small print, as “some prepaid card providers charge you for taking out a card, impose fees for topping it up and apply extra charges for any additional cards you request”, Which? advice states.
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If you did take cash on holiday, experts advise not to change it back on your return. Unless it is a huge amount, it could be worth sitting on it for the next few months.
Whilst some travel bureaus offer a buyback scheme for leftover travel money, this can still have fees on top that will cost any traveller.
Some high street chains have been known to charge 20 per cent just to exchange foreign money back.
Andrew Hagger, founder of Moneycomms told The Times: “Now is possibly the worst time to be changing money back, especially euros.
“There is no reason to rush in and change money back when you will be making such a loss unless you absolutely need the money.”