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Last update : July 2010
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How To Get The Best
Exchange Rate For Your Holiday Money
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| Long gone are the days when we poor consumers only had the banks to buy foreign exchange from where they took great pleasure in selling us overpriced currency with plenty of commissions and charges attached.
This is because over the last 10 years forward thinking entrepreneurs set up independent currency exchanges that offered the man-in-the-street a far better deal.
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| So where to go to get the best Exchange rate? |
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Fortunately this site has done all the hard work for us -
Note - for many of the best holiday FX deals the cash is sent via the post. Don't be worried about this as it will be fully insured.
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| Where to go on the High Street |
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Some people still prefer to get their holiday money when out shopping so what I'd advise is to first check on the www.travelmoneymax.com to see which shops are offering a good deal. And in my experience both Thomas Cook and Marks & Spencers sell at competitive rates.
Note however the online rate might be different (better) than the rate you'll receive in the shop. For example, Thomas Cook online might sell you 110 Euros for £100 but on the high street their shops might only offer 105 Euros.
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| Watch out for the 'zero commission' trick |
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I doubt if it's still possible to pay a commission when changing foreign currency as all the providers make a big song and dance about how they're 'commission free'.
Sadly, for many of the exchange bureaus 'commission free' is nothing more than a marketing trick. What they do is increase the rate of exchange to make up for the lost commission. For example -
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- Previously you'd change £100 into Euros and receive 110 Euros paying a commission of 3% - the rate of exchange would be 1.134 Euro to £1
- Now, you change the same amount of money and also receive 110 Euros but pay no commission - the rate of exchange is worse at 1.10 Euro to £1
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| So in reality commission free or paying a commission is now irrelevant. The only number to focus on is how much you're getting for your pounds when all fees and charges have been considered.
This no commission gimmick is a good example of secret number 2 - Do your own research - which is one of this site's 10 Secrets to Good Personal Finance
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| Summary |
| Be smart when changing your pounds into cash foreign exchange. Don't do it the old fashioned way and rely on your local bank or Post Office. Shop around on the internet as you can easily get 5% more for your cash and that's a significant saving for doing little work.
And this is backed up by our 10 Secrets to Personal Finance where number 5 is "Shop around - the internet is a great financial friend"
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