Buying Your Currency

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Buying Currency – Your Options

Buying currency can be a minefield with so many options available. If you pick the correct way of buying your currency you could easily save over £100 on a holiday.  There are 5 ways to spend while you are on holiday in the Orlando and here they are…
1 – The Traditional Way – buy real paper dollars from a bank, travel agent or bureau de change

2 – The FairFX Card – A Pre-Paid card that can enable to secure your spending money at the best rates

3 – The Zero Cards – Credit cards that charge no commission when abroad.

4 – Travellers Cheques – insured against loss/theft and bought from a bank, travel agent or bureau de change

5 – Spend on Other Credit and Debit Cards – use your credit or debit card for spending money abroad

Buying Currency The Traditional Way

Buying currency in the traditional way is still really popular. You do need to take some paper Dollars to the USA with you even if you are planning to do the bulk of your spending on plastic. Remember that there is no guaranteed way of getting the best exchange rate ever but if you follow my advice, you will be well armed to grab a great deal at the right time.

Buying currency via websites could give you a much better rate than the travel shops. I am not telling you to buy your currency from these websites but you can use this fact to get yourself a better deal. Every time I buy paper dollars I phone my local Thomas Cook shop and start haggling. I tell them what rate I can get from anther company and they usually match it.

This is an easy way of getting a good rate but getting your hands on the cash without waiting. They usually say they need to phone their head office and ask permission to match the price. They have always come back with a match but it could differ from store to store depending on the staff. Find the best internet rate even if you don’t intend to use that company and ask someone else to match it. You could save yourself up to $100 on a £1000 exchange for just shopping around and haggling.

FairFX Pre-Paid MasterCard

Fair FX LogoGet the best Dollar rates secured when you please… and save £9.95 through Mr Brit. Here is a run down on how the FairFX card works:

Imagine you had a magic piggy bank and every time you heard that the Dollar rate was good, you could put £50 or any amount into the magic piggy bank and it magically turned into Dollars at that rate. The FairFX card looks like a credit card but it is not a credit card. It is a Mastercard that you can use to pay for anything in Orlando. The difference is that you have pre-paid money onto this card. As an example – you are not going on holiday for 3 months but the current exchange rate is really good.

You can add any amount to your card when you feel that the rate is good. If you added £200 to your card, it would be transferred into dollars at that days rate. That amount would stay on your FairFX card in Dollars until you have spent it. The Dollars you have secured today would still be showing on your card until you spent them. The amount will not go down or up if the Dollar rate changes.

We use the FairFX card

Mrs Brit loves her FairFX card and we always use it in Walmart as well as most Orlando restaurants. It does take all of the stress out of having to phone around all the shops for the best rate. No currency shops will offer you the FairFX rate. As an example, as I am writing this, the standard Dollar rate is at $1.33 per £1. If I add £100 to my FairFX card at this very moment I will get $131. The Post Office are only offering me $126 so it really is a ‘no brainer’

This great card usually costs you £9.95 but with Mr Brits Guide To Orlando it’s free. Here is a quick run down on some of the advantages:

Buying currency with a Fair FX card has it’s advantages:

No charge for using the card abroad for purchases in card currency. Get the equivalent of a better Dollar rate if you pre-paid when the exchange rate was higher.

The card is FREE when ordering through Mr Brits Guide To Orlando when you top-up with just $20 (normal price £9.95) Click the image above to apply for the card and when you add at least $20 to the card you get the card for FREE.

As with any application, make sure you read all of the terms and conditions

Shopping at Supermarkets

The Zero Cards

These credit cards are great for regular travellers. We use a Santander Zero card whilst in Orlando and the best thing about them is the zero foreign transaction fees and no commission. You get the current dollar rate so if the rate is $140 on the day, you get $1.40. At time of writing they offer 0% interest on all purchases for the first 12 months. We check the rate while abroad and if it has improved, we tend to use our zero card more.

This credit card option does sound great but there could be down sides. If you are the sort of person that will pay the balance off at the end of the month then it will be fine. If you don’t pay your credit card spending off in full, this could be a bad option. Credit card interest rates will outweigh the advantage of the Zero card unless it is paid off in full. Some other banks offer their own version of the Santander Zero card so check if your bank offers one.

Travellers Cheques

Travellers ChequeA lot of people seem to be scared of using travellers cheques but they are a great way to buy currency. They are also the safest way of securing large amounts of paper spending money whilst you are on holiday. Travellers cheques are available from banks, The Post Office, travel agents and most outlets that sell real Dollars.

The rate you pay for travellers cheques will be the same rate that you would pay for paper dollars. The advantage of a travellers cheque is they are safer. They would usually be replaced if lost or stolen. You can order them in denominations just like real Dollars ie $20, $50, $100 etc.

How to use a travellers cheque

When you buy travellers cheques you would need to sign the upper line of each cheque immediately. When paying for something with a cheque, you date and countersign the cheque in front of the waiter/shop keeper. You will receive your change in real cash. When you use a travellers cheque you cross the serial number off your travellers cheque list. This list will be given to you when you buy the cheques. This way you know which cheques have not been used if they are lost or stolen.

If the worst happens, you can phone the travellers cheque helpline with the “lost or stolen” serial numbers. Replacements will be issued and they should be delivered to you really quickly. If you are opting for the paper over plastic currency, Travellers Cheques are the safest option.

Spending on Standard Debit and Credit Cards

Not the best way to spend while abroad due to the charges levied by the big banks. Some cards charge 2.75% of the value of each transaction and keep this for themselves. They can call it an “admin fee” or a “load” or a “service charge”. Whatever they like to call it, it is money from your pocket every time you spend on holiday.

Some cards will charge you interest on every overseas purchase even if you pay the balance off at the end of the month. There are cards on the market that do not charge as much as others so check your card terms before you travel. As mentioned above, the Zero cards are a great way of spending on plastic so weigh that option up. Even if you do not have a Zero card, apply for one even if you just use it for holidays.

When is the right time to buy currency

I go way back to 2008 here to explain what happens to currency rates in a recession. 2008 saw the Dollar rate weaken and strengthen against the pound like never before so guessing when to buy is as hard as making a living from gambling on horses. Interest rates affect the Dollar a lot so it is worth keeping your ear to the ground regarding interest rates. When the UK bank interest rate goes up, or the USA bank interest rate goes down, the pound usually gets stronger against the Dollar. Although the example below is from quite a long time ago, it shows what happens to currency in uncertain times….

on 22nd January 2008 the exchange rate was £1 to $1.943. The USA cut it’s bank interest rate by 0.75% later that day and the pound started to grow in strength. The following week on the 29th January the rate was $1.99 to the pound.

The reason the Dollar moved is because of the interest rate change. This makes the UK a more attractive place for American investors to place their money. This causes a large influx of American money into UK banks. Whenever there is an interest rate change for the better, it is wise to watch the rate for a while before jumping in. The exchange rate moves slowly so you need to give it some time to get the right price. It is like playing the stock market and nobody knows what will happen next. This tip is one major factor in obtaining a great rate.

The biggest drop

In October 2008, the last recession was just starting and the Pound was weakening. The UK interest rates were slashed by 1.5% and this made the Pound weaken further. This resulted in £1 buying you just $1.47. What a difference to earlier that year when £1 bought you $1.99.

Please note that credit and debit card companies can change their charges and rates at any time. The information on this “Buying your Currency” page is just for guidance. Before buying any currency or spending with a credit/debit card, check the up to date terms and conditions of your provider.