Currency exchange – avoid getting ripped off at the airport

It is common knowledge that the bureaux de change at airports are an expensive way of changing your hard-earned pound into another currency. Yet quite often during the rush to go on holiday, it is easy to forget to sort out the spending money and you end up buying it at the airport or Eurostar terminal – at the most expensive rate.

Scrutiny of exchange rates reveals that 10p in every pound can be lost when buying euros or dollars just because of the lack of preplanning. The average Briton spends £500 on a week’s foreign holiday that amounts to a lot of money being lost on poor exchange rates, even without paying commission charges transaction.

High street retail outlets like Marks and Spencer or the Post Office offer much better value than any kiosk at the airport but are more expensive than buying and pre-ordering your money online.

If you want the convenience of picking up your money at the airport, then be sure to pre-order to get a better rate. When we checked, €500 costs £470 at Heathrow Airport but only £442 by ordering in advance with Travelex.

Alternatively, you can pick your €500 at the following outlets. The table below shows how much you could save by shopping around.

Some top tips

• Don’t change your money at the airport. Plan ahead. Specialist providers offer much better deals.
• Don’t buy foreign cash from a UK bureau with a credit card. These will make a charge of £3 or more on top. Some debit cards charge too such as Abby, A&L, Barclays, Co-op and Lloyds TSB. This is because the withdrawal is treated as a foreign cash withdrawal. Consider using another debit card or withdrawing from an ATM instead.
• Don’t pay much attention to ‘commission-free’ statements. It is a good heading but often this is compensated by a poor exchange rate. Just ask what you would get for your money to get a precise figure.
• Most credit cards add a hidden 3% feel to all transactions, so spending £100 worth of euros will end up costing £103. Some specialist credit cards like Santander Zero, Post Office and Saga are a much better deal as they don’t make a charge and offer competitive exchange rates.
• The most expensive plastic to use abroad is from Abbey, Halifax, Lloyds TSB, Natwest and RBS. They add around 3% currency conversion fee, plus an oversea cash withdrawal fee and charge up to £1.50 every time you spend on them. All this adds up and turns £5.00 into £6.50 plus the load charge. It’s madness to squander your holiday money this way.
• Traveller’s cheques or currency cards can also help avoid the hefty fees bank.
• If travelling to the developing world or visiting several countries, consider taking US dollars, which can be used instead of local currency.