Bob Atkinson of TravelSupermarket advises that one could save a tenner for every £100 one tends to spend abroad, by being smart. He states a traveller should `plan what one is going to do and how they are going to spend overseas though not any plastic. Look for credit and debit card which are designed for usage overseas.
The market-leading deals like the Halifax Clarity credit card and Norwich & Peterborough debit card, have no hidden currency loading fees or transaction fees. If one tends to spent for instance 600 euros on one of these cards they tend to actually spend about £470 based on the prevailing rates.
On comparing it to the worst option which is to rock up at an airport and actually buy euros without pre-ordering, they endup spending about £515 on the present day’s rate at some place like Heathrow’. He further adds `that’s a difference of around 10% which means it’s effectively like throwing away £10 for every £100 spent on holiday’.While purchasing holiday cash, most of the people leave it till the last moment and tend to completely ignore it at times till they arrive at the airport.
Commodity loaded with Poor Exchange Rate/High Transaction Fees
Several travellers generally pay more than the going rate for their holiday cash hence some advance planning could help them in avoiding poor exchange rates or exorbitant transaction fees. Most of them tend to leave this job at the last minute resulting in paying extra pounds or more.
Just as one would check for the best deals on hotels and flights, they should also do the same when it comes to purchasing foreign currency which is a commodity that is often loaded with poor exchange rate combined with high transaction fees. Individuals should avoid buying the holiday cash at the airport since it is the most expensive place to purchase the spending money and the rates are extremely bad since the providers have a captive audience.
The main issue is `time’ and one should be wise in thinking about currency much in advance prior to leaving for the holiday. The first step to be taken is to look at the exchange rates which would help in maximising how much local currency one would get from the exchange.
Euro, the single currency, till recently has maintained its strength and customers are recommended to purchase their euros when the pound could make gains against the single currency. In the meantime, sterling has performed more positively against the single currency and holidaymakers need not rush and buy euros now.
Knowledge on Value of Currencies
On the contrary, if one is heading out to the United States, one could be wise in purchasing dollars sooner instead of later since at the moment the pound tends to perform well against the dollar though the same is not expected to last. Gaining knowledge on the value of currencies one could be looking to purchase, could save them of money in the long run.
The only way to know if one is getting the best exchange rate is to be knowledgeable on what the currency rate is. Prior to the trip, one needs to check on currency converter to have an idea of what exchange rate to expect. If undertaking a prolonged trip, check on the rate periodically to remain updated of any major changes.
According to Alistair Cotton, corporate dealer at currenciesdirect.com states that `now is a very good time to be buying US dollars. We are still on multi-year highs and businesses and people travelling abroad this year should be taking advantage at these levels’.
Fastest/Simplest Method - Online
Lucy Lillicrap of AFEX comments `current levels provide an excellent opportunity to buy the dollar at rates rarely seen since before the financial crisis’. Jeremy Cook, chief economist at worldfirst.com on the other hand states that he `thinks that the US dollar will progress through the year as one of the best performing currencies in the G10 space as the economy continues to rebound.
The Federal Reserve is much like the Bank of England, trying to remain vague on when interest rate rises will come but a stronger economy, fuelled by strong domestic industry and receding fiscal drag will increase the pressure on Federal Reserve chair Janet Yellen to normalise policy sooner rather than later’.
According to Josh Ferry Woodard of TorFX, he states that `in the light of Fed chair Janet Yellen’s suggestion earlier that the interest rates could be raised in the USA by April next year, it is possible that the US dollar is the one currency that the pound may struggle to stay afloat against.
For this reason, it is a very good time to buy US dollars; the pound-to-dollar exchange rate may not reach levels this high for a long time’. The fastest and the simplest method to buy currency is online, on the internet where it would be easy to compare rates and one could also get a much better deal.