Everybody wants to get the best deals on foreign currency, but with Brexit sending the pound into decline against other currencies, it’s only natural for people to be a bit worried about sorting their travel money. Here, Phillip Garlick from travel money experts H&T discusses how you can get the best deals on foreign currency when visiting Europe.
Planning a trip abroad is extremely exciting, but there are bound to be plenty of important things to think about before you set off and enjoy yourself. While you’ll need to remember to pack enough suitable clothes and get any important documents together, it’s also crucial that you know when to buy your travel money and where to get it from. This will be especially important if you’re planning to visit Europe given the uncertainty Brexit is bringing to exchange rates.
In this article, I’ll be sharing five of my top travel money tips for visiting Europe so you can make the most of your holiday.
Look at foreign exchange rates
Before you can make any decisions about when and where to buy your euros, it’s a smart idea to assess the foreign exchange rates. Currency changes are never predictable and, with Brexit negotiations still ongoing until October this year, the exchange rate is likely to be volatile for some time.
In general, foreign exchange rates are determined by how healthy the relationship is between the trading countries, among other factors — and if it wasn’t obvious enough, the current relationship between the UK and the EU is turbulent to say the least.
There are a couple of factors which determine what the foreign exchange rate will be, including:
Inflation rates: When inflation rates are low, a country’s currency value will typically rise. Given that GBP is currently subject to higher inflation rates, it has depreciated against more stable currencies including the euro.
Interest rates: Interest rates can swing hugely in a day, and with decisions to still be made with regards to Brexit, it’s likely to see downward pressure being put on sterling exchange rates.
Figure out the best time to buy euros
Given the above, it’s clear that the pound is experiencing a rocky period, which can make it difficult to know when to buy your euros. While some people may feel pressured to buy as soon as possible to avoid anything worsening in terms of Brexit, doing this isn’t always best.
It’s a smart idea to keep an eye on travel money rates for about a month leading up to your holiday. If the rates seem to be gradually increasing, this might indicate the potential for you to get better deals as time goes on, so you could wait until closer to the time of your holiday. However, if the rates are gradually decreasing, it might be best to buy sooner than later in case there is a drastic decline in value right before your holiday. Alternatively, if you can’t see any obvious patterns across the month ahead of your holiday, you may be best off buying half in advance and half last minute to prevent overpaying for all of your travel money.
Consider where you’ll buy your travel money
Most people tend to head to their nearest bureaux de change to get their travel money, but it’s worth knowing that you can get better deals when you shop online. This is because it’s easier to search the internet and compare offers than it is to go around the high street, which can be time-consuming for something that might not always be fruitful.
Make sure to check any fees or delivery costs associated with online purchases before you decide who to go with as these could add up, making it the same as other, more expensive sites.
Decide on your payment method
As well as deciding where you should go to buy your travel money, you’ll need to think about how you’ll pay. Although most travel money sites will let you pay with both debit and credit cards, the latter can be subject to interest fees even though you will have paid the full amount during the transaction.
Given the additional incurred costs, it’s best to buy your euros with a debit card rather than using credit cards.
Upcoming events that could affect the pound
With Theresa May announcing her resignation as Prime Minister in May, and either Jeremy Hunt or Boris Johnson set to replace her, the clock is ticking for the UK to find a new PM that will carry them through Brexit and help secure some kind of outcome.
Given the crisis situation the UK are currently in, there is an implication that there are many more things that could affect the pound. This could be anything from Johnson winning, to negotiating a deal, to extending again or leaving with no deal. Any of these could mean that it could be more expensive for you to buy your travel money, so it might be a good idea to keep a watchful eye on the statistics and act accordingly.
Buying travel money can seem complicated, especially given the current economic climate, but it doesn’t have to be. Take my five tips on board and you’ll be well on your way to getting the best deal for your travel money.