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The Best and Worst Ways to Exchange Currency

Foreign exchange is big business and there are many companies on the market vying for tourists’ money.

Travel Money

The Worst

Banks.  It is thought that over 70% of foreign exchange transfers are carried out by high street banks.  Because they attract so much of the market, banks are not forced to price their foreign exchange competitively and are therefore very expensive with rates they offer.  Many people use banks regardless, oblivious to the fact that there are far cheaper options on the market.

High Street Bureaus

Bureaus are great at what they do.  They offer an extremely convenient service from places like airports, high streets and anywhere else where they know people will be desperate for foreign currency.  The problem is, with this convenience comes a premium and customers are likely to receive 3-5% less currency than if they were to use other methods.

The Best

Currency Cards

Currency cards work in a very similar way to debit and credit cards.  If you want to withdraw funds from an ATM, you can; if you want to pay for goods in shop or food in a restaurant, you can.  You purchase the card online for a nominal sum; preload it with a set amount of money and when you take it overseas, you are not hit with the huge withdrawal fees that occur with bank cards.  You will also find that the rate you receive when “topping up” is far superior to other methods of currency exchange such as high street bureaus and banks.

Online Bureaus

Many specialised currency brokers offer tourist foreign exchange services and the rates they provide are some of the best around.  For example, if you book your currency with Travelex online, they guarantee that the rate will be the best around and it will probably also be 5-8% better than what you would receive at their airport bureaus.



The Pros and Cons of Exchanging Currency

The foreign exchange market is an extremely competitive one with many different companies wanting to attract your business.  This guide highlights the different methods available and the advantages and disadvantages associated with each.

High Street Banks.

Banks are where the vast majority of people organise their foreign exchange requirements and are thoughts to possess 70%+ of the market.  They are highly convenient and you are likely to receive your currency within minutes (depending on the length of the queue in your branch!).  The problem is that they tend to be rather uncompetitive with the rates they offer which impacts on your pocket.  Banks are best avoided if you have time to organise your foreign exchange as there are better methods to pursue.

Currency Cards.

The currency card is a relatively new addition to the industry and is essentially a preloaded credit card for sole use overseas.  Most currency card providers operate online although they offer an extremely easy, customer friendly experience. You simply pay a small fee to purchase the card (around £5), preload it with a set amount of cash and then take it with you on your travels.

There are a number of advantages of using currency cards over other methods of foreign exchange.  First and foremost, the rate that you receive is likely to be much better than what most bureaus will offer you.  They are also a very secure way to spend overseas and much safer than carrying travel cash.  If you lose your card, simply contact the provider and chances are, you won’t be out of pocket (other than a small card replacement charge).

The only downside of currency cards is that many of them are restricting with what countries you can use them in.  Most of the more popular currencies are catered for but if you are going to a more obscure country, you probably won’t be able to load your card with its currency.  The best thing to do is make sure you check with the provider before committing to a plastic purchase.

High Street Bureaus

The Bureau d’ Exchange operates in a very similar way to the high street bank.  They position themselves in places where tourists are in abundance and offer a quick, convenient service.  Again though, like banks, bureaus are one of the more costly options available to the public and should only be considered if time is a factor.


Currency brokers tend to specialise in bulk international transfers although some do provide travel money services and are worth considering if time is on your side.  The main advantage of using such a company is that they are very cheap and you will receive a fair amount of currency for your money.  The main drawback is that you will have to wait for it to be sent in the mail to you which could be a problem if you are looking to travel soon.

Currency Cards

Currency cards have become something of a revelation for frequent travelers, holiday makers and those that travel abroad for the occasional business trip. People no longer want to walk around a foreign country with hundreds, sometimes thousands, of the local currency in their pocket. The money can be misplaced or stolen at any time, ruining the entire trip as you worry about solutions instead of focusing on what you were out there for in the first place.

What is a currency card?

Essentially they are pre-paid cards much like the debit or credit cards we use everyday. You top them up online, by a bank transfer or via phone. The provider of the card will then transfer your native currency into the foreign currency for the country you’re visiting, e.g transfer Great British Pounds onto the card and it will be converted to Euros for you to use abroad.

Why would I use a currency card?

Those of us that have had the misfortune of using our debit or credit card abroad will have noticed the ridiculous bill that was waiting for us when we got home. Each transaction can cost anything up to £4.99, plus a surcharge of anything up to 4% of the value of the transaction. So, if you withdraw £100 from your bank account while on holiday in Greece via an ATM or make an in store payment, you will actually be paying £8.99 for the privilege of accessing your money! That leaves you with a few options; carry an obscene amount of cash around with you or make lots of smaller payments on your card — incurring an obscene amount of fee’s along the way instead.

Currency cards remove that dilemma entirely. You won’t be charged any fees for using an ATM abroad, unless the ATM provider themselves charge a fee, such as the ones we see in the UK which charge up to £2 per transaction.

The cards themselves are usable anywhere that you see the Visa or Mastercard logo and are used in the exact same way as your domestic card. Pop your card into the ATM and enter your pin. It’s safe, convenient and can be replaced if you lose it or have it stolen. If the card is stolen, it’s useless to the thief without the pin, so your funds will remain available!

In addition to all of these lovely little features, you will also receive a much more competitive exchange rate than you would from your bank. High street banks are notorious for charging a huge markup on currency exchanges, which can be avoided completely by dealing with one of the many tried and testing providers that we recommend here on

Why not just use travellers cheques?

If you have ever used travellers cheques you will know how fiddly they can be. You have to have your passport with you at all times to exchange the cheques for cash, which is a massive risk in itself. If you lose that passport, you’re going to have a difficult time getting home. Travellers cheques also have the negative aspect of unfixed exchange rates. If you purchase £1000 worth of Euros and the price of a Euro increases while you’re abroad, you will actually get a lot less to spend. This can make budgeting for your trip an absolute nightmare and has been known to leave people in awkward financial situations while in foreign countries.

How much do the cards cost?

Most currency cards are free of charge. The providers make a small margin on your currency exchange, while still ensuring that you pay much lower rates than you would on the high street.

What happens if I overspend?

You can’t! As with all pre-paid credit cards and debit cards, you can only spend what you deposit on the card — there are no overdrafts!

Are they reusable?

You bet! A currency card has an expiry date, much like any other card. So long as the card is still valid, you can use it as many times as you please, just make a deposit through one of the normal channels. If you have no intention of visiting the country again, you can simply call the provider and ask to “buy back” the currency, which will result in the remaining funds being deposited back in your account minus a small administration fee. If it’s just a matter of £20 or so left on the card though, you can use it in shops or at ATM’s in your own country and just pay the small fee associated with any such transactions.