How to get the best travel money deals

Travel money may be the last thing on your mind when preparing for a much-needed holiday. 

While you may be swamped with finding the right travel insurance or sorting out travel delay compensation, it’s important to pick the right spending option to maximise your holiday savings. Leaving it too late to swap your cash could mean getting stung by high exchange rate debit card fees or bank fees.

Specialist apps and credit and debit cards for travelling abroad or even your supermarket could help with your currency needs, ultimately boosting your spending money.

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Here’s how to secure better exchange rates and get the best deal on travel money.

1. Don’t exchange currency in the airport

The general rule when it comes to travel money is to avoid airport exchanges. A survey by travel money experts eurochange last year found that holidaymakers buying €1,000 at Gatwick, Birmingham and Heathrow typically lose out on around £176 compared with high-street branches.

Exchange bureaux at the airport have a captive audience as once you are ready to fly, there isn’t much choice about where you get your cash. This means you will typically get poorer exchange rates and will be left with less spending money once abroad.

That’s why it’s important to sort out your travel money and currency exchange rates before you reach the airport and make your money go further. 

2. Use the right travel money cards 

It may be tempting to just use your credit or debit card when spending abroad. But you could be hit with high charges on overseas spending and as much as 5% for cash withdrawals when using a mainstream high street bank card. 

According to research by TotallyMoney, some credit card providers charge a huge £4.59 in fees on a £20 withdrawal. In real terms, this represents a 22.95% charge.

Some specialist travel credit cards including the Halifax Clarity MasterCard and Barclays Rewards Visa don’t charge for overseas spending or ATM withdrawals.

A number of current account providers also offer fee-free spending abroad as well as competitive exchange rates. This includes Chase’s current account, First Direct’s 1st account and Santander’s Edge account. 

Meanwhile, challenger banks Monzo and Starling provide fee-free spending and withdrawals abroad too.

Check your account terms though as while most of these cards can be used in well-known European or American destinations, it’s unlikely you’ll be able to use them in more far-flung places.

Another option is using a prepaid travel card or a currency card that links with your current account from providers such as Currensea, FairFX, and Revolut.

Similar to a travel debit card, there won’t be charges for overseas spending or withdrawals and the exchange rate will be better than what you would get at the airport.

3. Supermarket loyalty programmes

Most savvy shoppers are familiar with supermarket loyalty schemes that give you discounts on your grocery shopping.

Tesco customers can access discounts on items if they are a Clubcard member, while Sainsbury’s offers cheaper products if you sign up to its Nectar scheme. This is part of the latest phase of the supermarket price wars, with shoppers essentially getting their food cheaper as long as they are registered on one of the loyalty schemes.

But it isn’t just cheaper sausages and soap on offer from these supermarket giants. Registered customers can also get lower exchange rates on travel money, ultimately giving them more to spend abroad.

For example, Sainsbury’s customers can currently get a euro exchange rate of 1.1428 EUR for £1. But if you are a Nectar member, that rate improves to 1.1451 EUR, which means you end up with slightly more in your pocket instead. 

It’s the same for Tesco Bank and Clubcard members. Tesco Bank offers a euro exchange rate of 1.1435 EUR, but if you’re a Clubcard member, you get 1.1458 EUR. 

Though this won’t make much difference if you’re taking out smaller amounts, the savings start to add up the more you withdraw, and could give you some extra spending money for, say, a two-week family holiday.

4. Shop around 

Your supermarket may seem convenient, especially if you can make a saving as a loyalty scheme member. But it’s important to shop around for the best deal, by using comparison websites such as Go.Compare and Travel Money Max. 

MoneyWeek found bureaux offering better euro exchange rates but much will depend on what is available near you and if you want the convenience of using a card abroad or getting your holiday cash with your frozen chips. 

5. Find the best travel money providers

When converting pounds to other currencies, you can either go to your high-street bank or order travel money online. We’ve rounded up the best travel money providers to help you find the best deal. Note that this is based on withdrawals of £1,000.

Rates on Wednesday, 10 April 2024.