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3 steps to saving on currency exchange

Consumers can save up to £167 by shopping around

Australian dollars

Tourists can save up to £167 on a typical Easter holiday by shopping around for the best foreign exchange provider.

Which? came to this conclusion by comparing the rates offered by currency exchange providers and the charges tourists face when using a credit or debit card abroad.

The three steps that made up our research are as follows:

  • a couple buying 1,000 euros before a holiday
  • then spending a further 1,000 euros on their card whilst abroad 
  • and finally exchanging 100 euros back into pounds when they return. 

The difference between using the best and worst providers in this scenario totalled £167. For dollars, it added up to £128.

Despite this, 42% of Which? members admitted to us that they didn’t shop around before using a currency exchange. 

Go further: Currency exchange providers compared – dozens of providers rated based on customer feedback

What currency exchange providers offer the best rates?

We tracked exchange rates at 30 online currency providers, five UK airports and 10 high street outlets between 29 January and 26 February. 

Based on the average rates over those weeks, we found that the cheapest option for buying 1,000 Euros was online provider Best Foreign Exchange (£834.44). This was over £100 cheaper than airport provider ICE Luton (£934.84).

Best Foreign Exchange was also the best choice for buying $1,000 (£612.19). The most expensive option was Manchester Travelex (£683.71).

For those looking to sell back 100 euros or $100, ICE offered the best deal – £81.43 and £59.18 respectively. At the other extreme, Thomson offered only £71.94 and £52.08.  

Go further: Travel money – our extensive guide covers all the options for buying foreign currency

What are the best cards to use abroad?

After researching the whole debit and credit card market as well as 21 leading prepaid card providers, we found that the cheapest payment method in Europe and the US was a credit card that doesn’t charge for overseas transactions.

Spending 1,000 euros on a Halifax Clarity or a Post Office MasterCard credit card would have cost £822.04, if you paid your bill in full at the end of the month. Spending $1,000 like this cost £603.15. Both scenarios are based on 17 card transactions in the week starting 10 February 2014.

At the other end of the scale, using a Halifax debit card this way would cost £878.67 in Europe and £652.16 in the United States. 

Go further: Best credit cards to use abroad – we’ve scoured the entire market for the best deals

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