Make the most of the Exchange Rate

currency exchange

Sterling is relatively strong against the Euro at the moment, currently standing at just over 1.36 Euros to the pound. If you’re still to book a holiday this year, the pound in your pocket right now could get you a cheaper holiday or hotel at a number of destinations, and give you greater spending power while you’re travelling.

Some people think the exchange rate is at a peak, and it might be wise to find ways to ‘lock in’ your gains now. However, nobody has a crystal ball – exchange rates could go down, or they could go up and even the currency experts can’t predict what might happen. One thing is for sure: it’s always essential to look for the most favourable offer whenever you decide to buy by comparing rates and fees against the rest of the market, and looking out for hidden charges.

Popular holiday destinations for making the most of it

One noticeable difference is a relative drop in the cost of living in certain locations, and the weaker Euro means that accommodation, meals out and shopping are better value for British holidaymakers in those areas. For example, self-catering holidays in Portugal and Spain are especially attractive at the moment, and you could find yourself a bargain with Villas.com or Meon Villas. Holidays in France and Italy are popular right now too, as they’ve become affordable to more Brits.

Outside of the Eurozone, the pound is currently strong against the Turkish Lira and Thai Baht, so if you’re thinking about going to Turkey, have a look at merchants such as First Choice for cheap deals plus cashback offers. There’s also been increased interest from holidaymakers booking breaks in Scandinavian and Eastern European countries, and Mauritius.

Getting the best deal on your holiday money

Many of us like the convenience of using cards to pay for holiday expenses and to get cash out of ATMs. However, it’s very important to know that not all cards are created equal and it’s a good idea to shop around for the right one.

A specialist travel credit card can help you avoid foreign transaction fees, give you a favourable exchange rate, and not charge you a fee for using ATMs (although be warned, some ATM providers may still have surcharges). They can also give you the option to pay for your shopping and meals in the local currency at a fair rate of exchange.

If you’re looking for a specialist credit card for travel, research all the features of the card to make sure it meets your needs, and compare the whole of the market. You might like to consider Aqua cards (Reward or Advance types), Lloyds Avios, the Post Office credit card, or Nationwide credit card, among others.

Specialist travel credit cards tend to be most suitable for people who can pay the balance off in one go when they get home, as interest charges can be high on outstanding balances.

It can also be convenient to have some local currency with you as you arrive at your holiday destination. Foreign Exchange providers offer a wide range of rates, and some are more favourable than others so it pays to shop around, also looking out for extra fees. Booking in advance means a better deal as you won’t be stuck with what’s offered to last-minute customers at the airport.

When comparing offers, consider the offered exchange rate, transaction fees, and any delivery costs before making your final decision. You can also get cashback when purchasing your travel money from Travelex, FairFX and the Post Office, so don’t forget to clear browser cookies before placing your order.

Locking rates in with a prepaid card

Prepaid cards are becoming more popular, and work in a similar way to the old travellers’ cheques. They allow you to lock in the exchange rate on your day of purchase, although the rate could rise rather than fall after your purchase so there’s an element of risk. To get around this, some people happy with today’s exchange rate are locking in 50% of their holiday cash in advance with a prepaid card, then getting their remaining money exchanged shortly before they travel, possibly getting the best of both worlds.

Prepaid card rates vary, so always research the market before purchasing. Prepaid options may also be subject to fees for ordering the cards, ATM surcharges, transaction fees and other additional charges, so take the time to read the small print. On the plus side, a PIN-protected card is safer than carrying cash and it can help with budgeting too because you’re unable to overspend.

Good examples include Fair FX, Caxton FX, my Travel Cash, and Ukash (who are currently offering £8.40 cashback). Check for cashback on all prepaid cards, as this can make them better value.

Has the favourable exchange rate made you consider a specific type of holiday or a particular destination this year?

Disclaimer: Figures stated in this article were correct at the time of publication but are subject to change - currency exchange rates may fluctuate rapidly and are unpredictable. Please carry out your own research carefully before making any currency exchanges or purchasing other financial services, and remember to check individual merchant pages carefully for the latest offers and cashback information.This blog post is in no way offering financial advice. You should not make a decision based purely on the information in this post

Posted on 08 Jun 2015  |  Posted in  Cashback Diary, Tips & Updates
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