Don't let holiday cash costa too much

13th July 2007 at 01:00
Alison Brace heralds the arrival of commission-free foreign currency delivered to your door

Your bags are almost packed and you've secured the best deals on your flight or ferry crossing, travel insurance and car hire. But how much thought have you given to your travel money?

If holiday spending is something you always sort out at the last minute as you dash through the airport, or at the first cashpoint you see on foreign turf, then it's time to change your habits if you want to make your money go further.

And really, it couldn't be easier. This year, there is an abundance of commission-free currency deals which can be delivered directly to your door.

"Long gone are the days when foreign money was only available at the branch of your bank," says Lisa Taylor, of search analyst "Today most pro-viders offer an online telephone and branch ordering service, and most will offer branch, home and sometimes airport collection.

"Don't leave it to the last minute: purchasing at the airport will normally include a premium for the convenience."

Some providers, however, do charge as much as pound;5 for home delivery, so read the small print carefully when placing your order. Marks Spencer, the Post Office, Thomas Cook, HSBC and NatWest all offer free delivery as long as you are ordering a certain amount of money.

Given that upfront commission fees of between 2 and 3 per cent can now be avoided, the key is to find the best exchange rate. This has usually meant trawling round each provider, but now MoneySaving has launched its Travel Money Maximiser. Tap in details of how much money you need in which currency, and it works out where to find the best ex-change rate.

If you still think it is more convenient to use plastic on holiday, then beware. Martin Lewis of MoneySavingExpert says it is not only credit cards that charge a fee for transactions abroad, many debit cards do, too.

He says to avoid the following cards, which charge anything between 75p and pound;1.50 per transaction: Halifax debit card, Lloyds debit card, RBS debit card, NatWest debit card.

Withdrawing cash from a machine using these cards will cost you anything between 1.5 per cent and 2.25 per cent of the transaction. And that's all before an exchange "load" charged by the banks of around 2.75 per cent.

Taking the right card on holiday, he says, is the best way of saving money abroad. The Post Office and Nationwide credit cards have no exchange charge anywhere in the world and there is no fee for spending.

Saga has a similar card, with the same deal in Europe. But stick to using the cards for spending and settle your bill promptly when you get home. Use them for withdrawing cash and you will be charged a fee.

The Nationwide's Flexaccount Visa debit card, however, is similar to the above credit cards, but doesn't charge you for withdrawing cash. The only catch is that you must have a Nationwide bank account.

If you arrive on your holidays and only have your debit card, then Martin's top tip is to make a one-off cash withdrawal to avoid transaction fees. For instance, if you take out pound;200 from the Halifax, you will pay a Pounds 1.50 withdrawal fee. But make 20 separate withdrawals which add up to Pounds 200 on the same card, and charges come to pound;30.

Now wouldn't you rather be spending that on a meal and a bottle of wine? Check out the best deals and sort out your holiday money early this year

The best of the zero per cent commission deals

Marks Spencer: Free branch or home delivery. pound;5 home delivery fee if order is less than pound;500.

Post Office: Free branch or home delivery. pound;5 home delivery fee if order is less than pound;400.

Thomas Cook: Free branch or home delivery.

Travelex: Bureau collection.

HSBC: Free branch or home delivery available. pound;3.95 home delivery fee if order is less than pound;250.

Halifax: Branch delivery. Home delivery charge of pound;5, not available for online orders.

Lloyds TSB: Free branch delivery. Home delivery charge of pound;4.50.

Nationwide BS: Home delivery charge of pound;3.50.

NatWest: Free branch or home delivery. pound;5 fee for home delivery orders of less than pound;500.


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