Whether you want to eat out with Colons in Costa Rica, make phone calls with Ringitts in Malaysia, or do whatever with your Dong in Vietnam - getting foreign currency the right way can save you a fortune. This guide to getting the cheapest foreign currency includes the free Travel Money Maximiser which finds the very best deal for you.
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Without doubt the cheapest way to spend abroad is with the right credit or debit card, unfortunately the worst way to spend is with the wrong one. It substantially overcuts getting even the cheapest foreign currency.
Anyone with Halifax, Lloyds TSB, RBS or NatWest Debit cards should avoid them like the plague when abroad as you'll pay massive charges. Yet there are some specialist cards designed specifically for spending overseas that can save you money; the simplest way is to apply for one of those and then keep it for using abroad. For full details, and regularly updated best buys read the Spending Overseas: The cheapest cards to use article.
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Even though the right plastic is fantastic, sometimes that's not possible; it may be too late to apply, your credit score mightn't be up to it, plus it's always nice to have some of the right notes in your pocket when landing at a foreign airport. Thus my aim here's to get you the most buck for your bang.
The worst thing to do is wait until the airport
Exchange rates at airports are very poor. This is quite deliberate as you're trapped in a closed environment; if at all possible avoid getting your currency from there. This applies even to bureau de change companies that have branches outside airports too - their airport rates will be lower.
Let's dispel a myth. ‘Commission free', isn't the holy grail of finding the right bureau de change, it's just another way to confuse the equation. Foreign exchange bureaux make their money in two ways.
- Commission Charge. This is a fee added when you convert, effectively meaning that the amount of cash actually exchanged is less than the amount you hand over to the cashier.
- Exchange rates. This is more subtle, and is used particularly by the currency sellers who trumpet their ‘commission free' status the loudest. Much worse exchange rates are offered to the customer than those the bureau receives itself, so that the difference can be harvested as pure profit.
Tight Tony v Generous Gordon - How to find out who's cheapest.
This example is designed to show the point...
Tight Tony's service is commission free, while Generous Gordon charges a £1.50 fee. However, a more favourable exchange rate offered at Gordon's Bureau means that although £1.50 less is being converted, you'll actually end up with more MoneySaving Dollars for your £100.
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'With Commission Broker' vs 'Commission Free' Broker | ||||
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Commission |
Exchange Rate |
MoneySaving $ received for £100 |
Saving |
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Tight Tony's Travel Agent |
NONE |
£1 buys 17 MS$ |
$1700 |
- |
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Generous Gordon's Bureau de Change |
£1.50 |
£1 buys 18 MS$ |
$1770 |
$70 |
It is important to remember that the exchange rate is constantly changing, so your comparison of different bureaux should really be done all on one day, otherwise the outcome will be skewed.
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To make this easier, I've had a special web tool designed which trawls the web for you to find the very cheapest deal. It's called the Travel Money Maximiser and it whizzes to all the main online providers for you, to tell you who'll give you the most foreign cash on any given day.
It's designed to incorporate any commission fee into the exchange rate, so you simply find out the best one for you. And if you want your currency delivered, rather than picked up, any extra fees for this are incorporated too. Though do be aware many bureaux de change only send to the address registered to the card you pay on (i.e. not your work address), and are pretty strict on the identification they need, so make sure you've got your passport to hand.
Why does it only search online providers?
The obvious answer is it's a web tool and this is much easier to do. Luckily though web providers almost always undercut their high street equivalents. So get a web quote and go and pick your currency up, and you usually get more than just walking into the same branch and getting the cash.
Can the Travel Money Maximiser be beaten?
The aim is to include all the UK web based Bureaux de Change, yet there are a few bureaux without websites that will beat it marginally. These are commonly small establishments, based in areas with large amounts of overseas visitors where competition on rates is very high - such as Bayswater in West London. If you live near these it's worth checking them out; if they do start websites and delivering currency, they'll be added to the Maximiser.
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