My top tips to make sure the sterling slump doesn’t lose you even more on your travel money.
In early June I booked to go away in November. I was quietly smug that I’d been able to save hundreds of pounds on our flights, even being able to add in stopovers in New York and Las Vegas on our way to Mexico for less than a return fare to Cancun.
But since then the country has voted to leave the EU, leading to a couple of big falls in the value of the pound. The drop this week means the pound is close to its lowest level against the dollar since 1985 – and could fall again.
Exchange rates always go up and down, but this has been a huge drop in value, meaning my holiday could potentially cost me around 20% more than when I budgeted for the trip. Flights are locked in, but hotels and spending money will be at the new rates.
So what can I do about it? Well the rates are the rates and I’ll have to pay more than I had planned. I’ll cut back on other spending over the next few weeks to boost my holiday budget. I can obviously try to spend less when I’m away too, either through doing less or staying in cheaper hotels. But I don’t want to miss out on the things I had planned as a result.
Ultimately, the best thing I can do – and I do this every time I go abroad – is to make sure I pay as close to the actual exchange rate as possible.
Here’s what I’m going to do, and if you’re going away too you can do the same.
I’ll avoid my debit cards
You are hit with an array of extra fees when you pay with most debit cards (and most credit cards too) meaning you don’t even get close to the real exchange rate.
I’ll be leaving these cards behind.
I’ll pay as much as I can on a specialist credit card
The best rates are with specialist credit cards such as the Halifax Clarity credit card, which at today’s rate will get me close to $123 for £100 spent. Essentially the card doesn’t charge any fees or interest on purchases. The only exception is interest is added for cash withdrawals.
Alternatives are the Creation Everyday card, Santander , Barclays Platinum, Post Office and Nationwide Select. All these are credit cards so make sure you pay them off in full every month to avoid interest and other charges.
If you don’t fancy one of those you can try the Supercard by Travelex. I’ve had no problems with it, though I’ve heard of people having them cancelled due to PIN issues while away, so I wouldn’t recommend them as your only option.
Depending on when you are going on your holiday, you might not be able to get any of these in time, but it’s well worth applying and having it ready for your next trip.
I’ll order my money in advance
I always bring some cash with me. It’s not just as a backup in case cards go wrong. It’s also often more convenient in some countries, especially America. But it can be really expensive to change your money if you don’t plan ahead.
Airports are among the worst places to get your currency. This week there have been pics circulating on social media of it costing more than one pound to get one euro at some airport bureau de changes, meaning you’d get some 10% less than the actual exchange rate.
If I was to just get cash at Gatwick airport today, MSE’s Travel Money Max comparison tool shows me I’d get $113 for £100.
Now, ordering it in advance to collect from the airport would get me $120 – seven dollars more. And I’d get a dollar more again if I ordered it to collect from a bureau in London (though that might not be worth the hassle of queuing up during my lunch hour).
I’ll pre-pay where I can
The ship has pretty much already sailed on this one, but there’s speculation the pound will drop further before the end of the year, so it might be worth pre-paying for hotels whenever I can to lock in at the current rates.
Of course, it could go the other way and I’d lose out. That’s the decision I need to make – and I guess you do too.