Tourists warned to plan ahead when exchanging currency
14 October 2016 08:48
Holidaymakers are being warned to plan ahead to avoid "disgraceful" currency exchange rates being offered at airports
Holidaymakers are being warned to buy currency in advance as exchange rates being offered are as little as 0.96 euro to the pound at airports.
An investigation by foreign exchange firm FairFX calls the currency exchange rates "disgraceful".
Airports take advantage of 'captive audience'
FairFX said some providers are effectively charging holidaymakers as much as 16% commission for the convenience of buying travel money at the last minute.
Ian Strafford-Taylor, CEO of FairFX, said: "They know they've got a captive audience and once you're there, you usually have no alternative."
The value of the pound has seen some strong fluctuations since the vote to leave the EU in June and is suffering from a dramatic hit in last Friday's "flash crash".
Expert shares his top tricks
Guy Anker, managing editor of consumer help website MoneySavingExpert.com, says travel credit cards could help keep people's spending costs down when abroad, including the Creation Everyday card, Barclaycard Platinum and the Halifax Clarity card.
"You need a decent credit rating to get the top cards so they're not going to be for everyone," he said.
Mr Anker suggests tourists may well find they could be better off waiting until they have arrived at their destination and then taking the money they need for their holiday from an ATM overseas.
He said another trick is to order money online in advance and then keep an eye on the exchange rates.
Some providers allow customers to order online and later cancel, sometimes for free and sometimes for a charge.
Mr Anker believe travellers can hedge their bets by making an order with a provider that allows cancellations.
If the pound improves, they could cancel the deal and then re-order the currency at a better rate, or if it weakens, they will have locked in at a time when the exchange rate was better.
He said: "Airport providers that charge you horrific rates actually can provide good rates online, and if you order (your currency) online before and pick it up at the airport you will pay the online rate which is almost always a much better rate."
Holidaymakers should also take out travel insurance to protect themselves when they travel.