Going abroad has suddenly got more expensive this Easter as the pound has plummeted against many currencies.
If you are heading to Europe or the US, your pounds will buy you 10% fewer euros than last year and 9% fewer dollars. It makes getting the best deal when you buy currency more important than ever.
If you are someone who likes to have cash in case of emergencies, you should also check what you will get for your surplus currency when you get back. Doug Gowan, head of travel money at Tesco Bank, warns: "It's not just before you go that you have to do your research. When you come back you need to make sure you are not hit by a poor exchange rate when you want to change your leftover currency back to sterling."
For most of us, however, the top priority is getting the best exchange rate before we go away. This normally means planning ahead. Waiting to buy your currency at the airport will mean you get less for your cash, so ordering online is advised.
Supermarkets, the Post Office, travel agents and online currency brokers are all competing for business now, so banks no longer call the tune. Often you will not be charged any commission, but, as Gowan says: "Commission-free deals don't always mean you are getting the best price."
Exchange rates are what really matter and a recent Which? survey found online provider ICE consistently offered the most favourable rates, with Travelex and Saga coming equal second.
With an online provider you generally order the currency and it is delivered to you at home via Royal Mail's guaranteed next-day delivery service.
Despite the better exchange rates available online however, most people still prefer to buy their cash across the counter, according to Which? Top of its instore ratings were Tesco Bank and The Co-operative Travel, while M&S Bank and the Post Office – the most frequently used sources of currency nowadays – ranked third and fifth. Bottom of the league were Lloyds TSB and Travelex.
One of the snags with ordering online is that you have to be at home to sign for the currency when it is delivered, and if your order is worth less than around £500, you will have to pay a delivery charge of up to £5.
A compromise is to order online but to pick your currency up from a branch. ICE, for example, has offices at Glasgow Central and Edinburgh Waverley stations. This strategy also works with instore providers such as Tesco Bank, American Express and Travelex. Online currency purchases can be picked up free of charge at Tesco branches, while Travelex and American Express currency orders can be collected at airport branches.
Some people have already started buying currency for their summer holiday in case the exchange rate for sterling worsens further, although exchange rates are notoriously difficult to predict in advance.
A popular alternative is prepaid currency cards which you can load up in advance for a fee. Competition in this market is also helping to drive down costs, with ICE, for example, launching a new fee-free prepayment card.
The snag with online currency providers is the extra risk involved. As Which? points out, currency exchange is not an activity that is regulated by the Financial Services Authority or covered by the Financial Services Compensation Scheme. So if a company collapses before you are sent your currency, you could lose out.
Tom Johnson, head of online business at ICE says his company would welcome greater regulation, but in the meantime he urges consumers to opt for trusted providers. He says: "People need to do their homework and make sure they are dealing with an established online provider."
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