Should I buy euros now or wait until after the election to buy holiday money?
HOLIDAYMAKERS travelling abroad this summer may be wondering whether it’s worth buying their euros now or after the election.
Political events can impact the value of currency based on whether markets think it is positive or negative for the economy.
The Pound remained pretty steady against foreign currencies after Prime Minister Rishi Sunak called a surprise snap election in May.
But political chaos in France saw the Euro plummet against the Pound in early June – good news for Brits jetting off to the continent.
With the UK’s General Election just a few days away, many travellers have been left wondering what to do when it comes to converting their holiday money.
But will the election outcome cause rates to improve, fall or stay the same?
Today, you would get €1.18 for every £1 you exchanged, according to investing.com.
So, if you exchanged £200 for Euros today, you could get €235.56.
We spoke to some currency experts to get their view on what holidaymakers should do.
Should you buy your currency now or after July 4?
Simon Phillips, managing director at No1 Currency, said exchange rates fluctuate from day to day for a number of reasons, so picking the “perfect” time to exchange your cash can be tricky.
However, he said it’s worth bearing in mind that “big surprises” are what tend to impact exchange rates the most.
“For example, the Euro fell sharply after French President Emmanual Macron surprised everyone in June by calling a snap election.
“For the UK general election result to have a big impact on the Pound, we’d really need to see a shock result.
“Right now, the currency markets are assuming Labour will win comfortably, so the impact would be greatest if the outcome was something else, such as a hung parliament or a surprise Conservative win.”
Yiannis Zourmpanos, a consumer trends analyst and financial consultant, thinks holidaymakers who are worried about the fluctuating pound should buy half their holiday money now and half closer to the time.
“This way, you can benefit from the good exchange rate now and also be ready to take advantage of any changes after the election,” he said.
“Keep an eye on the exchange rates as the election gets closer and after it happens.”
A great tool for doing this is XE.com, this website provides live updates on exchange rates to help you monitor how much your money is worth overseas.
Keeping track of these live updates is about being able to spot whether a currency is going up or down in value.
Buying your foreign currency ahead of when you travel means you can search around for the best rates.
The best way to get holiday money
Firstly, never leave buying your cash until you get to the airport.
Andrew Hagger, founder of Moneycomms.co.uk, said: “Make sure you buy from a competitive low-cost currency provider but whatever you do don’t exchange currency at the airport as you’ll lose out big time on the poor value exchange rates.”
You can compare travel money companies online, including the rates and any fees, to find the best deal.
Factor in delivery costs or opt for one where you can pick up the money and choose the option that gives you the most cash to spend on holiday.
If you have left it too late, you might still be able to order online and collect it at the airport.
You can use comparison websites such as MoneySavingExpert.com‘s TravelMoneyMax, where you can compare pick-up and pre-order rates.
Don’t use your credit card
Never pay for travel money with a credit card.
Transactions like this are usually treated as a cash withdrawal.
This means you’re likely to pay a cash fee and have interest added even if you fully repay.
It’s best to always use a debit card or cash to buy currency.
Meanwhile, we reveal five ways the general election could affect your finances -including mortgages, childcare and benefits.
What are the alternatives for spending abroad?
THERE are a number of specialist cards that can give you a great exchange rate and fee-free spending and cash withdrawals when abroad.
These cards include debit and credit cards and pre-paid cards, which allow you to pay abroad without fees or at a set exchange rate.
Check your debit card
You should always check the terms and conditions of your debit card to see if, on the off chance, you can use it abroad without any extra fees.
This can often take the pain out of having to buy currency ahead of time and rely on cash.
Your bank will automatically convert your transactions to the correct currency with the live exchange rate so ensure that you always pay in the local currency.
Chase, First Direct and Starling all offer fee-free spending when yous use their debit cards abroad.
Those without this capability could choose to link their bank account with Currensea’s Mastercard debit card via open banking.
Then when you spend or withdraw on the Currensea card, it charges your linked current account in pounds (via direct debit), avoiding the non-sterling transaction fees and ATM fees that most banks charge.
Travel credit cards
Travel credit cards allow you to spend money abroad without being hit by any fees or hidden charges.
But, they may still charge you for taking cash out.
We recommend the Barclaycard Rewards Visa because it doesn’t charge for using it abroad, and there are no fees for withdrawing cash if you pay off your bill in full each month.
You must always pay off your balance before the end of the month with these cards to ensure that any money you save isn’t wiped away by paying interest.
Prepaid card
An alternative to carrying cash or your debit card around is to get a pre-paid card.
Brands like Revolut, Wise and EasyFX all provide prepaid travel cards.
HSBC launched its Zing subsidiary in January 2024, which gives existing and non-HSBC customers access to a prepaid debit card without fees.
The card can hold up to 10 currencies and be used in more than 200 countries.
These cards allow you to put a set amount of cash on the card at a fixed exchange rate.
So if the rate is good now you can put money on your card, and it will stay that rate when you are on holiday.
But, these cards can sometimes have hidden costs and charges so be sure to read the small print.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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