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Travel Money/holiday Money Exchange

If you’re planning a holiday or weekend away, you’re sure to have a tonne of things to think about. You’ve got to plan your flights, accommodation, buy new clothes, pack your bags (and meet increasingly stringent baggage weight allowances), book your taxi/airport transfer(s), and perhaps most importantly, get to the airport on time. As if all of this wasn’t enough to think about, you’ve also got the added issue of organising your travel money. This usually entails a last minute trip down to your local bank or travel agency money change desk where you’ll be able to trade in your home currency (i.e. the money you spend in your home country) for holiday money (i.e. the currency you’re able to spend in your chosen destination). If you’re particularly unorganised for your trip, you may even end up exchanging travel money at the hotel or airport; a particularly costly process compared to performing a money exchange at a local bank or using a credit card. But, even if you prepare well in advance and avoid such costly places, exchanging travel money can still be an extremely costly process that can easily leave you out of pocket, thanks to excessive and/or hidden fees.


It doesn’t matter where you perform your money exchange; you’re still going to end up paying a fee of some sort. The reason for this is simple: this is how banks, credit card companies and travel agencies make their money. After all, it’s important to remember that they’re not helping you out with your holiday money situation solely out of the kindness of their hearts; they’re here to make a profit. While most of us have accepted that there will be at least some monetary loss (due to these fees/charges) when performing a money exchange, many of us end up paying substantially more than others for what is effectively the same service.

According to an article published over three years ago by the BBC, performing a money exchange of £500 into Euros could cost anywhere from £10 to £30, depending on the exact method of exchange and the service used to perform the transaction. This means that you’re losing between 2% and 6% of your holiday money in exchange fees alone. Plus, if you don’t end up spending all of your money during your holiday, you’ll then have to pay a fee for the second time, just to exchange your holiday money back into the original currency.


Perhaps one of the biggest parts of the problem is simply that holidaymakers are unprepared and often, they fail to plan their money exchange in advance. Because of this, more costly alternatives (such as airport/hotel exchanges) are commonly used, which usually incur a higher fee. What’s more, your local bank is unlikely to let you know that you could potentially obtain a better deal from a competitor or alternative money exchange service when you’re physically standing at the desk ready to part with your hard-earned cash. They do want you’re money after all.

However, perhaps an even bigger (and certainly more frustrating) part of the problem is that many companies mislead customers using “marketing-speak”, complex charges and hidden mark-ups/fees.

Lloyd's BankThe phrase “0% commission” is common in the world of holiday money exchanges (as you can see from the screenshot above) but more often than not, this simply masks a different fee, which – thanks to the tiny small print - you often won’t realise you had to pay until you’ve actually gone-through with the money exchange and can’t go back. Plus, even if you are a super-aware savvy shopper, the plethora of different fees, excessive charges, varying exchange rates and hidden mark-ups makes it extremely difficult to make a well-informed decision, as it’s almost impossible to manually compare various money exchange services against each other.

Here’s an example of the small print from the Lloyds Bank money exchange service pictured above:

Small print text

If that’s too small to read, here are a couple of notable parts:

If you use a credit card and order online or over the phone, there will be a cash handling fee charged. There is a 1.5% card handling fee (min £4 and max £15) for MasterCard and Visa credit card transactions. Other debit or credit card issuers may charge you when you use their card to purchase Travel Money from us.

Customers who do not hold a Lloyds Bank current/savings/business account, credit card or loan will be charged 1.5% commission (minimum £3) on buy-backs of foreign currency travellers cheques. As you can see, the small print certainly starts to eat into that “0% commission” claim.


So, we’ve established that the world of money exchange can be a complicated and excessively expensive one, but how exactly do you make sure that you get a good deal and don’t pay any more than you have to for your travel money? Well, the best place to start is to look at the current currency exchange rates between your start and end currency. For example, if you’re going on holiday to Germany from the UK, you’ll need to look at the exchange rate between GBP and Euro’s.

Every money exchange service should openly publish their currency exchange rates, so it’s a matter of taking a look at the various services and looking which has the most favourable exchange rate. For example, for a trip to the USA, an exchange rate of £1/$1.60 is more favourable than a rate of £1/$1.50 and for an exchange of £1000, choosing the money exchange service offering the second exchange rate would save you $100.

Lloyd's BankYou can also use an online currency converter tool (such as the one we have at, pictured above) to see how much holiday money you should ideally get when exchanging (before fees). After this, make sure to check that there are no other hidden fees such as credit card charges or minimum fees (like our Lloyds Bank example earlier in the post) as these can also pump up the cost of your money exchange. This may take a bit of time to do, but considering that you stand to save up to 4% of the value of the money exchange by choosing the right option, you could easily save hundreds of pounds if you’re planning to exchange a substantial amount of money.

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