How To Avoid Holiday-Money Horrors


Updated on 16 December 2008 | 2 Comments

If you don't want to get ripped off when buying foreign currency for a trip abroad, read these travel-money tips!

With the school summer holidays well under way, millions of holidaymakers will be jetting off overseas over the next few weeks. However, sun-seekers looking to take a break from this year's truly awful British summer must tread carefully when it comes to buying foreign currency.

The market for holiday money is notorious for using sneaky marketing and spin so as to keep charges hidden from unwary consumers and make it all but impossible to compare deals. One trend in the holiday-money market this year is the tendency for more and more currency providers to offer 'commission free' deals. However, in order to make up for this lost revenue, they have worsened their exchange rates, so paying close attention to these should be your top priority.

To make life easier for you, I've done the spadework. Here is a review of the online rates available at nine leading travel-money providers:

How much does it cost to buy a thousand euros?

Provider

Exchange
rate

Commission
charge

Total (£)

ADD delivery fee

Travelex.co.uk

1.4471

Nil

691.04

Bureau collection only.

Marks & Spencer

1.4280

Nil

700.28

Free branch or home
delivery available. £5
home-delivery fee for
orders under £500.

Lloyds TSB

1.4200

Nil

704.23

Free branch delivery.
Home-delivery fee of
£4.50.

HSBC

1.419781

Nil on orders
of £100 to
2,000

704.33

Free home delivery
available. £3.95 home-
delivery fee for
orders under £250.

Halifax

1.4171

Nil

705.67

Branch delivery
available. Home-
delivery fee of £5, not
available for online
orders.

NatWest

1.4159

Nil

706.26

Free branch or home
delivery available. £5
home-delivery fee for
orders under £500.

Nationwide BS

1.4157

Nil

706.36

Home-delivery fee of
£3.50.

Post Office

1.4094

Nil

709.52

Free branch or home
delivery available. £5
home-delivery fee for
orders under £400.

Thomas Cook

1.4000

Nil

714.29

Free branch or home
delivery available.



Source: Moneyfacts and providers' websites, 30/07/07

As you can see, Travelex.co.uk once again takes top honours, as it does every time I compare travel-money deals these days. Marks & Spencer claims the crown for high-street firms, with Lloyds TSB being the best of the big banks.

As usual, you can rely on travel agents to offer the worst deal, with Thomas Cook taking the wooden spoon. The difference between best and worst is an extra £23.25, which is a worthy saving.

How much does it cost to buy a thousand US dollars?

Provider

Exchange
Rate

Commission
charge

Total (£)

ADD delivery fee

Travelex.co.uk

1.9911

Nil

502.23

Bureau collection only.

Marks & Spencer

1.9490

Nil

513.08

Free branch or home
delivery available. £5
home-delivery fee for
orders under £500.

HSBC

1.946656

Nil on orders
of £100 to
£2,000

513.70

Free home delivery
available. £3.95 home-
delivery fee for
orders under £250.

Nationwide BS

1.9437

Nil

514.48

Home-delivery fee of
£3.50.

Lloyds TSB

1.9331

Nil

517.30

Free branch delivery.
Home-delivery fee of
£4.50.

NatWest

1.9307

Nil

517.95

Free branch or home
delivery available. £5
home-delivery fee for
orders under £500.

Halifax

1.9296

Nil

518.24

Branch delivery
available. Home-
delivery fee of £5, not
available for online
orders.

Post Office

1.9280

Nil

518.67

Free branch or home
delivery available. £5
home-delivery fee for
orders under £400.

Thomas Cook

1.9100

Nil

523.56

Free branch or home
delivery available.



Once more, Travelex.co.uk grabs gold and M&S takes silver. HSBC takes bronze as best bank, with Lloyds TSB dropping to fifth behind Nationwide BS.

Yet again, the Post Office and Thomas Cook are to be avoided, propping up the bottom two slots in our table. The difference between best and worst is an extra £21.33.

Finally, here are five quick tips to getting the best deal on holiday money:

  1. Take the time to shop around by checking a few providers. Don't just visit your local bank or travel agent.
  2. Plan ahead and don't leave it to the last minute. Buying at the airport may be convenient, but it is also remarkably expensive.
  3. Watch out for delivery charges, which can be as high as £5.50.
  4. Many providers still charge a commission fee for sterling travellers' cheques, which adds 1% to 1.5% to their cost. So, don't overlook commission charges.
  5. If you pay by credit card, then you will probably be charged a cash-handling fee of around 2.75%, which will more than wipe out any savings made by getting the best exchange rate. Stick to paying by debit card, instead!

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