Travel

Companies often charge a commission to exchange sterling into a foreign currency. The commission might be a percentage of the transaction or a flat fee, but it should always be included in your cost comparisons. In other words, you need to find the company that offers the best exchange rate at the lowest cost.

A number of firms advertise commission-free exchange, which can be appealing to the cost-conscious traveller. But don t be blinded by marketing gimmicks. A company that offers commission-free exchange might not give such a good deal on the exchange rate. You could therefore end up with fewer euros or dollars in your pocket.

More companies these days are happy to arrange a foreign currency exchange over the internet. Online services are convenient, but check out the delivery times and costs. Some firms can arrange next day delivery of the currency, but there might be a delivery charge. A number of companies charge for delivery only if you exchange a small amount, say under 500 and you might be able to avoid the delivery charge completely if you can pick up the currency from a local branch. So be sure to explore all the options.

Remember not to take too much cash abroad as it can easily be lost or stolen. There will also be a cash limit on what you can claim on your travel insurance policy, which means you will be covered only up to a certain amount. For example, if the cash limit is 250 and a thief makes off with your wad of 500, the policy would only pay out 250, minus any excess (which itself could be 50 or 100).

You might not expect to return from your trip with any leftover currency, but you never know. It s therefore a good idea to find out if the company charges commission to buy back the foreign currency. The exchange rate will also be different, so again it can pay to shop around.

Look out, too, for any sales or promotions of foreign currency, particularly during the holiday season. And if you buy from your supermarket, you might be able to earn loyalty points for the transaction.

Foreign exchange can be confusing, but there s really only one figure you need to know: how many euros, dollars or rand will you have in your hand after all costs and charges have been deducted. Of course, if you need any help, MoneySuperMarket s foreign exchange comparison service has all the facts and figures at the click of a mouse.