Friday 31 May 2019

Finance Fridays - Making the most of your holiday money

We were talking about if smart meters are working for last week's Finance Fridays. This week we are thinking of our holidays. Going away for a break aboard is expensive so you'll want to make the most of your holiday money. This starts before you leave the country. If you plan well then you could end up with a lot money to spend while you are away.

Get cash before you go – Most foreign holidays are planned weeks if not months in advance so you should be able to have the chance to shop around. Take your time to find out which is offering the best exchange rate. You can get the main foreign currencies in a number of places these days such as department stores, supermarkets, travel agents, banks and the Post Office. I have a Debenhams store card and found they offered the best Euro rate the last time I needed to change money so it shows to makes sense to enquire where you can and make use of all special customer deals. For the record the money I exchanged didn't go on my store card I just needed to show I had one. Do also factor in any commission fees.

If you want Euros or US dollars then every bureau de change should carry large quantities of these at all times. For other currencies they may need to be ordered in especially for you so take this account. Some will be able to have the currency in stock the next day but others will take a few days to come in.

Never exchange cash at the airport or terminal as they take advantage of panicked, last minute travellers. The rates will much worse than if you buy elsewhere. If you need cash while you are aboard avoid currency exchanges in tourist areas as they will also offer poor exchange rates.

Pre-paid card – If makes sense to take a credit or debit card abroad but it does make it very easy for you to overspend. To have the control of cash but the security and convenience of a credit or debit card take a pre-paid card instead. You load them up with a cash amount of your choice. They usually carry the Mastercard symbol on them so you will be able to use it wherever takes Mastercard (which is practically everywhere).

When looking for a pre-paid check to see if you have to pay a fee for taking out the card or even using it. Some will start charging a fee if it is inactive for a number of months so it may be worth cancelling it if you are not a frequent traveller. Look for those which come with an app which you can monitor your spending on. This will also allow you to make sure your card or details hasn't been stolen. Some card providers will be able to deliver a new card to you at your holiday accommodation if you do lose it in any way.

Stay local – 'When in Rome pay as the Romans do,' by this I mean always choose to pay in the local currency whether you are using cash or a card. Some places will be very happy to get their hands on a valuable currency, such as sterling, in cash but they will charge you extra in return. Likewise when paying with a card. This is because the exchange rate will be set by a foreign bank and you won't receive preferential rates.

Where do you exchange your holiday money? Do you use pre-paid cards?

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Finance Fridays



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