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Tips For Your Foreign Exchange Before You Travel Abroad

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Whether you are planning your next family holiday, romantic break, once-in-a-lifetime backpacker trip or make regular business trips abroad, travel money is an essential factor.

Even if you decide to go with traveller’s cheques or a travel money FX card for the main portion of travel currency, some cash is always necessary for small purchases (market stalls, restaurant tips, a quick coffee) and in some cases it is the only form of money that is accepted – in some countries plastic cards and traveller’s cheques are not accepted.

Where is the Cheapest Travel Money?

If you are like many people in Britain, you grew up getting your travel currency from a high street travel agent or even at the airport, from bureaux de change. But today, there are much more cost effective ways to get travel money – you’ll see how much money you can save!

The cheapest travel money is found under your very nose – on the internet. This is now a generally accepted fact, and you may be asking yourself why. Well, online currency exchange providers (companies that provide travel money) can access the ‘interbank rate’ or forex spot rate’.

What is the Interbank rate?

The interbank is the official rate of exchange between large banks and corporations when they buy and sell currencies. Because they make such massive transactions, they get to use this low rate. Finding a service that gets you something near the interbank rate is essential, for instance if you were looking for the best way to transfer money to Spain, a broker that doesn’t set an interbank rate may ned up more expensive Tourists usually access less attractive rates because they are only dealing with small transactions.

Online travel money companies access this rate and can pass the majority of it to you, the customer. How? Well, they have much smaller margins they operate online so they don’t have to pay expensive high street overheads. They don’t pocket a sizeable chunk of the good rate for themselves, leaving the customer with a poor rate, because they can afford to pass more of a good rate on!

Not only that, but they rarely charge commission and extra fees are scarce – but we’ll look at that later in this guide (see below).

Are there any Fees?

We now know that the online travel money companies offer cheaper exchange rates than at the air terminal or on the high street. We also know that commission is hardly ever a factor just check to see if a company includes this fee, though it is highly unlikely that they will do (unlike at a regular bureau de change!). But what about fees?

You’ll be pleased to hear that fees are also not a common factor among online travel money companies. One example where a fee might occur is if you order home delivery of your currency, but after the daily deadline (usually 3PM though this can vary). In this case, you might be charged a delivery fee (check if there is one/what it is in advance). And that’s it! No more fees though do make sure you check a company first just in case.

What is the Minimum Amount I have to Exchange?

If you are buying travel cash, you might have to get a minimum amount – this varies according to company but could be up to Ł200. This is ideal for any trip abroad but if there is any money leftover, your travel money provider might offer to buy it back, again at no commission.

Is there a Maximum Amount I can order?


This depends on the company. Some will set a maximum of around Ł2,500 but others may have no maximum you can order as much as you want. Check when browsing for a suitable provider.

Can I buy Foreign Currency with a Credit Card?

In most cases, you can buy currency online with a credit card. However, your card company could charge a transaction fee and the travel money company might be forced to charge 1.5% purchase fee – so consider alternative options. A debit card might be cheaper or in many cases you can set up a bank transfer service.

Are there any Disadvantages to Online Travel Money?

So far, it sounds as though online travel currency providers really are the cheapest option. Are there any disadvantages? Well, you might be required to set up an account with the company – but this is free and takes about 5 minutes. If you are on a very last minute schedule you might find it quicker to quickly exchange money at the airport but just remember those inferior rates and extra fees!

Another drawback to taking cash abroad is that it can get lost or stolen and once it’s gone, that’s it. However, as mentioned above it really is essential to take some notes and coins (perhaps go for the minimum exchange amount) to make small local purchases (taxis, tips and so on).

You might find that you prefer a Travel Money FX card for its practicality (just pop it in your back pocket). An FX card also carries the opportunity to fix rates while they’re good. You can even get a card in sterling, use it anywhere and the conversion to local currency is made at the point of sale – guaranteeing you the latest rate!