top 5 exchange rate need-to-knows
- The RIGHT credit cards consistently give the cheapest way to spend abroad
- Beware extra charges using credit cards to pay for bureau de change cash
- Avoid the debit cards from HELL - some fine you for spending abroad
- Don't let bureaux hold your cash for long - you've little protection
- Don't wait until the airport to change cash, rates are hideous
Where credit cards or loans use a representative APR, this means that 51% of successful applicants will be given the stated interest rate.
With credit cards, the rate for purchases (as opposed to balance transfers or cash withdrawals) is used as the main rate to advertise the card.
So if that is described as 19.9% representative APR, then 51% of people accepted will get 19.9% APR, but 49% will get a different rate (likely to be higher).
Loans are slightly simpler as they only have one rate. So if a loan is advertised as being 7.5% representative APR, this means 51% of accepted applicants will get 7.5%, and 49% will get a different rate (likely to be higher).
Of course, some people will be rejected outright for the card or loan too.
Bureaux de change are NOT protected
If you use a bureau de change to exchange cash, and it goes bust while it has your money, you have no protection. This is why we warn against using these firms to buy money a long time in advance. This even means there's a slight risk in using delivery options - handing over your pile of cash in return for theirs is the safest route.
There are a couple of different levels of regulation for bureaux, but the golden rule is:
If ANY bureau goes bust when it has your money, you're NOT protected.
Don't let it hold your cash for any longer than needed.
Usually this isn't a problem, but on rare occasions it can be and there's little recourse. For this reason, we reiterate this is a ‘travel money' tool for small holiday transactions. It's not a tool for sending large amounts abroad (eg, for buying a house) ‐ see Sending Money Overseas for that.
What does it mean if the bureau is FCA-authorised?
Bureaux de change don't have to be authorised by the regulator, the Financial Conduct Authority (FCA), because they are not viewed as providing a payment service - instead the business is simply seen as selling you goods (foreign cash) in the same way corner shops sell tins of baked beans (we've lobbied for this to be changed).
Most of the bureaux listed in the travel money tool are FCA authorised - but some are not. We explain what this means for you below.
What advantages does FCA authorisation give?
If a bureau is FCA authorised, it means it has to meet certain requirements and provide the FCA with information so that the FCA can monitor the business. The FCA also have the power to fine these firms if they fail to meet the FCA's requirements. FCA authorised firms must also provide all customers with specific details about transactions, applicable charges and how to complain - find out more.
Banks, building societies, the Post Office, and certain other public bodies can operate in this market without explicit authorisation, as the FCA already supervises them more closely for other aspects of their business. Indeed, these big trusted brands are probably a less risky option than a smaller bureau de change.
What about the other types of regulation for a bureau?
Some bureaux aren't FCA authorised but they are FCA registered. That means they don't have to provide as much information to the FCA - so the FCA has less control and can't monitor the firm as closely.
But, either way both registered and authorised bureaux must follow certain FCA rules such as how they provide services to their customers and having a formal complaints procedure.
Should I only use FCA-authorised bureaux then?
We're not saying you shouldn't use bureaux that aren't FCA authorised. If you're just using the bureau to exchange a small amount of cash for your holiday relatively quickly, you should be fine. Remember, even if an FCA-authorised bureau went bust your money is still not protected.
Which companies are included in this tool?
We spend a lot of time researching and deciding the bureaux that should go in the travel money tool. As we've explained, some bureaux are FCA authorised - some are not - and some are FCA registered.
All the bureaux are registered with HM Revenue & Customs under the Money Laundering Regulations. This means that bureaux must have certain controls to prevent them being used for money laundering by criminals and terrorists. For full details, read - HMRC's guide.
Though again, we stress, that still doesn't mean you have any protection from them going bust and we don't check for firms' solvency when we include them in results, it's just an automated list.
Don't wait until the airport to change cash, you get hideous rates
You're a captive customer at an airport or ferry terminal, so you'll probably be lumbered with the worst rates possible.
If you must get it from the airport, pre-order for pick-up to get a better rate (usually possible until four hours beforehand). Use the search on the left, selecting 'Airport pickup', and this will list the providers that allow you to do this.
WARNING! This tool was not designed for large amounts of cash
We have built this focused on travel money for holidays, not larger transactions. The warnings and info given here is tailored for that. If you are planning to change larger amounts it's important to be aware...
There's no protection system. If a bureau went bust while it was holding your money, you're unlikely to get that cash back, so the longer they have it, the bigger the risk. Find out more about bureau de change protection
There are cheaper ways to send money abroad. Bureaux are not necessarily the cheapest or safest way to do it. You'll be better opting for a specialist exchange broker who can offer the best rates on larger amounts. Full info in the Sending Money Abroad guide.
We provide the information below if you choose to continue, for the sake of rate comparison only...Continue
There's no compensation scheme if this firm goes bust
Some smaller travel money delivery firms ask you to pay by cash, cheque or bank transfer rather than using a card for payment. Before you do this it's important to remember these companies don't have any form of compensation scheme. So if one of them goes bust with your cash, you're on your own.
Yet when you make a payment by debit or credit card, you have more chance of getting your money back if the company you're paying goes bust, than just sending them the cash. Also, it's likely the currency provider will have your dough for a shorter period, decreasing any risk.
While this is untested for travel money transactions, it at least means you have a potential secondary route (your card provider) to getting your money back. These rules apply.
Credit cards - Section 75: This law means your credit card is jointly liable for anything you buy on it over £100. So if there's a problem or the company goes bust, you can still get your money back from your credit card provider.
This isn't the lender being nice, it's a legal protection . It's in place so that never in the position of paying debt for something you didn't receive or wasn't as it should've been. There is a worry 'cash' transactions aren't covered - the Ombudsman says it thinks foreign currency would be OK, but again it's important to understand that it hasn't been tested.
However, it's also worth considering the extra costs you'll pay using a credit card to buy foreign currency, and deciding whether it's worth it. You'll usually pay a fee to the retailer, a fee to the card provider, and cash withdrawal interest - which may not be worth it for an untested protection.
Debit cards - chargeback: If you pay on a debit card, or credit card for transactions under £100 (otherwise go for Section 75), then the chargeback system means you can ask your bank to try to get the money back off the company's bank.
However, this is part of Visa, Mastercard and Amex's internal rules and not a legal requirement, so can't be 100% relied upon.
For further information on these protections, and their limitations, plus how to make a claim through them, read the full Chargeback and Section 75 guides.
How we work out the estimated walk-in amount:
It's not easy to get up-to-date rates for rocking up to the airport and changing your cash there and then. So we've done some research and worked out the average rate mark-ups - in other words, how much worse the rate is likely to be if you get your money this way, including estimated commission charges.
We called every airport bureau to get its rates for the most popular currencies on a particular day. These were euros, US dollars and Turkish lira. We then compared them with each bureau's online rate on the same day.
So to estimate today's airport walk-in rate, we've assumed the percentage difference between the airport rates and online rates always remain about the same, and applied that to today's exchange rates.
It's only an indication. But it does show that if you're going to leave it till the last minute, ALWAYS order online. Or better still, plan ahead and go for the top bureaux rates.