All you need to know about buying travel money and currency
Holiday money explained
If you’re preparing to jet off on an exotic holiday or important business trip, one of the most important things to organise before you leave is travel money and currency. There are loads of different forms of travel money that you can take with you abroad and many different rates available for these.
The majority of travellers are in the dark when it comes to knowing how to get the best value when buying travel money and currency. Many put a lot of time and effort into researching the best flight and hotel deals for a trip, but often don’t put the same thought into buying travel money and currency.
To help you know how to get the best deal, used this guide to learn more about buying travel money and currency.
When it comes to buying travel money and currency, exchange rates are vital to getting the best value for money. The exchange rate is how much one currency is worth at any given time in terms of another.
The exchange rate changes constantly, and the majority of the world’s currencies are determined by the foreign exchange market and change depending on supply and demand. These rates are affected by a number of factors including the current trading relationship between two countries, inflation, interest rates, current account deficits, political stability, public debt and terms of trade.
It is essential to keep an eye on the exchange rate when thinking of buying travel money and currency. While even the most experienced financial experts struggle to estimate how exchange rates will change, being aware of them can help you to get the best deal.
Different forms of travel money
Travel money and currency are available in a range of different types, and how you purchase your travel money can make a difference to the deal you get and how you spend your funds while you’re away. Here are the most popular forms of buying travel money and currency:
Many travellers bring their foreign currency abroad in the form of cash, and it is a popular option as you always know exactly how much you are spending. Often it is essential to carry some cash on you while on holiday to pay for things like odd snacks or bottles of water, taxis and tips.
It isn’t advisable to carry large amounts of cash on you while away as it can be unsafe and a target for theft or get easily lost. Most travel insurance policies only cover cash up to a certain amount, so if the worse was to happen your funds may not even be protected.
Pre-paid travel cards are a popular choice
Another popular alternative to carrying cash abroad is to get a pre-paid travel card. They are simple and easy to use; you just load the amount you want onto the card before setting off on holiday and then spend on it as if it is a debit or credit card. These cards are great for sticking to your budget because you cannot spend more than you pre-pay. It is also possible to load multiple currencies onto a pre-paid card which is great if you are planning on travelling to various countries.
The main downsides of buying travel money and currency on a prepaid card are that you will often be charged for withdrawing the funds as cash from an ATM, and also for topping up the card with additional funds.
This form of buying travel money and currency is becoming less and less popular over the years as it is not the most convenient or widely accepted option. Traveller’s cheques are pre-printed cheques for a fixed amount that are used to pay for things in shops while abroad or can be exchanged for cash in the foreign country.
Using traveller’s cheque for buying travel money and currency is often more expensive than cash or pre-paid cards as you need to pay an additional fee to purchase them and then usually pay a commission when spending them.
When to buy travel money
Often travellers leave buying travel money and currency to the last minute, which makes getting the best value a difficult task. You have no control over that day’s exchange rates, leaving you no choice but to accept whatever price it happens to be at that time.
It is always worthwhile spending some time checking the exchange rates every few days for a while before your trip; this will give you a decent idea of what a reasonable exchange rate looks like for the currency you need. When the exchange rate seems good you can usually purchase it online and lock-in that rate for a period of time; if the rate gets even better you can cancel your order and get an even better rate.
Where to buy travel money
You can purchase travel money and currency from a range of places, and some will be offering better deals than others. Many companies allow you to purchase travel money online and arrange a delivery or collection, or you can visit a bureau de change or bank on the high street. The post office has its own travel money service, as do most travel agents.
Travel money can also be purchased at airports. However, this is almost always much more expensive than the alternatives if you really have no choice but to get travel money at the airport, pre-order it online for collection to get the best rates.