Buy your travel money online and you will save more than it costs for a family of four to spend the day at Lago Martianez!
Travel money has already had it’s ‘Rip Off Britain’ moment that seems to grip every industry these days. Not too long ago the idea of 0% Commission on changing money was used as a big selling point and was emblazoned across travel agents windows.
What is not so much common knowledge is that exchange rates are not fixed by the currency markets but anyone or any company can just choose what exchange rate they want to offer completely at will. It is more about what the buyer is prepared to pay rather than the cost of the currency you are buying.
Like it or not, if you go to Tenerife or any of the Canary Islands, you will be paying for entrance fees, drinks, food and all the other expenses of a holiday in Euros. If you use your debit or credit card, either your bank or the shop you purchase from will charge you its exchange rate of the day.
If you are given the choice in a shop to pay in Pounds or Euros always choose Pounds. If you choose Euros, you will be charged at an exchange rate set by the shop, if you choose Pounds the exchange rate is set by the bank. The bank’s rates are not that great but they are not likely to be a complete ‘rip off’.
You need to have Euros so where should you get them?
The answer really comes down to the idea that the exchange rate is down to what the buyer is prepared to pay. The online currency providers know that you can do a single Google search and find half a dozen well known competitors so they set their rates very competitively. Some use their strong brand name to get away with poorer rates but project themselves as a safe pair of hands. Others really offer the best exchange rates at any cost just to get the market share and are not too worried about making a profit on the travel money.
If you don’t want to buy online, you’ll find the high street providers such as banks and travel agents are still prepared to compete but you have less choice so the rates are not as good. You can prove this easily to yourself. Go to your local Post Office, check the Euro rate in the window and then check the rate on their website on your phone. I guarantee the rate will be better online and it may easily be 5%-10% better online. Now 5%-10% may not sound a lot but when you are talking about a week’s spending money that can be €80 more in your pocket.
The worst deal on travel money is always at the airport or worst of all on the plane. Here you are a captive audience and there is no incentive for the airline to give you a good deal.
Buying online does mean you need to be a little bit organised. You do need to order your money in advance. Nearly every online provider uses Royal Mail Special Delivery and it is normally free but you need to allow at least 24hrs for delivery but that is cutting it fine if you ask me. If you allow a couple of days safety margin to make sure you have your money before you leave, you should be fine.
The rates do change every day and even several times during the day. I would suggest you start 10 days before your departure and check out a few currency providers and see what rates they offer. Then check again the next day to see which way the rates went. If you notice the rates getting worse, then it is probably best to buy your money earlier. If the rates are getting better then hang on. Every time that rates goes up the more money you will get.
Remember on holiday cash is king and you cannot leave a tip or buy a bus ticket with a travellers cheque nor give one to your children to buy an ice cream.
About the author
Peter Rudin-Burgess is a partner at CompareHolidayMoney.com and has been blogging on travel money and exchange rates since 2010.