Ways to help with sterling dropping
The value of sterling has dropped this week as investors worry about the possibility of no clear winning in the next General Election. With Labour and Conservatives so close it could mean a hung parliament in a few months.
If you are planning a trip overseas in the near future, you need to plan how to make the sterling go further.
One good tip is never change money at the airport – you’ll end up paying much more. Go online to find the best rate of exchange.
When you’re exchanging money, you may be attracted to a place that advertises commission-free deals. However, these may not be the cheapest, so make sure you compare the total cost.
Although a credit card may be a convenient way to spend overseas, it can be costly. Most providers will charge you a conversion fee of between 2.5% and 3.0% when you use a card outside of the UK.
Do not use your credit card to withdraw money overseas. In addition to a conversion fee, you’ll also be charged a cash withdrawal fee, which is usually around 2.0%. Many credit cards also charge a higher rate of interest on withdrawals, too.
When making purchases overseas, pay in the local currency. In this way, you will benefit from the Visa or Mastercard rate of exchange.
A prepaid card is safer than carrying a lot of cash. You can get one with the currency of your choice and it may well have cheaper fees.
It is okay to use your credit card if you have a card designed for overseas use, but watch out for hidden charges.
When flying home, using up any remaining foreign currency can be expensive. Airlines charge a currency exchange fee. It will be cheaper to pay in sterling.