Your Money: Cashing in on holiday currency

As you plan ahead to your holiday, flights and accommodation are not the only elements that need organising in advance.

Planning where, and when, you get your holiday cash could save you money.

Time is of the essence.

The euro is currently at a seven-year low against the pound.

In fact, in the last year alone the euro has become 10% weaker and that translates into an extra £10 of spending power for every £100 that you spend in the eurozone.

So how can you take advantage of today’s good rate?

Pre-paid cards

One way is to buy your currency through one of the increasingly common pre-paid cards.

These let you buy your euros at today’s exchange rate, but one which will usually be better than that offered in a bank.

You pay now for the euros, or any other foreign currency, and they are loaded onto your card.

The cards are then ready for immediate use, at an ATM or even in a shop, and you get the certainty of locking in today’s rate.

But this also means you are taking a small gamble on the foreign exchange markets.

You may be assuming that the euro is at its weakest point and will not become any weaker.

You might be wrong and could miss out on further potential gains.

“Our advice is to pre-pay up to 50% of your holiday cash when a rate seems good,” says Rupert Lee-Browne, chief executive of Caxton FX, one of the bigger providers of cash cards.

“Clearly with the euro at a seven-year low, you are getting a relatively good rate even if the euro weakens further.”

Full article on the BBC.

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