Save money on holiday spending

9th October 2016, by Dave Watts

The £ has plummeted since the Brexit vote

The £ has plummeted since the Brexit vote

Since the Brexit vote the pound has plummeted. Last week, there were reports of some airport Bureaux de Change offering only €0.97 for a £1.

The tourist rate listed in the Times on Saturday was €1.08 to the £ and US$1.21 to the £. When we did our price calculations for the last issue of WTSS in June 2015 we were getting €1.35 and US$1.5 to the £. That’s a 20% decline against both currencies, making local prices 25% more expensive in terms of pounds.

The general view among economic pundits seems to be that things will get worse rather than better for the £ as the uncertainty for the UK’s future post-Brexit continues.

So what can you do to mitigate the fall in the pound and its effect

First, avoid airport Bureaux de Change like the plague; they normally give a dreadful exchange rate and may make an extra charge as well.

Some years ago, I always used to get the cash I needed for ski trips by using a Nationwide FlexAccount card in the local ATMs and used a Nationwide credit card for paying for meals etc. You got a decent rate of exchange and there was no charge for getting the cash or paying by card.

But then things changed and Nationwide started introducing charges. Nearly all credit and debit cards now make hefty charges (3% say) and/or give a poor exchange rate when you use your card abroad.

The solution I arrived a few years back now (and am still happy with) is a
Caxton FX card for getting cash and using as a debit card to pay for things. With the Caxton FX card, you transfer cash to it from your bank account and convert it into euros, Swiss francs, Canadian or US dollars etc. I currently have balances in euros and Swiss francs.

The money is available for you to spend or get cash in the same way you can with a debit or cash card. The exchange rate you get is a very competitive one and there are no charges for transactions.

You can load the card with foreign cash whenever you like – so taking advantage of any temporary upturns or avoiding possible downturns in the exchange rate. On the day of the Brexit vote (23 June) before the result was announced, for example, I decided to hedge my bets and loaded £1,000 of euros and Swiss francs on to my card at €1.27 and CHF1.39. I now wish I’d loaded more but will be on the lookout for any temporary upturn in the pound as an opportunity to load more.

I also have a Halifax Clarity card to use as a credit card. With a Halifax Clarity credit card you also get a very competitive exchange rate and it is free to use for buying goods and services so long as you pay off your bill in full each month. Last Thursday, for example, I spent Swiss francs on my card on Easyjet flights back from Geneva next March and got an exchange rate of CHFR1.24 to the £ (compared with the CHFR1.17 listed in Saturday’s Times).

But if you withdraw cash from ATMs using a Halifax Clarity card, you will pay interest on it until you pay off your bill in full.

If you make a card purchase abroad (any card, not just those mentioned above), you are often given the opportunity to choose whether to pay in pounds or in local currency. It is almost always cheaper to go for the local currency option to avoid punitive exchange rates and local charges.

Note: if you use the Caxton FX links here to get a card, WTSS may get a small commission. But editor Watts (a past editor of Money Which?) really does use and recommend this card.


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