Don't get caught out on currency...Top tips to get the best out of your holiday money
In this age of instant online banking, few of us give a thought to getting the best deal on our holiday money.
Gone are the days when you queued with travellers' cheques outside a foreign bank or schlepped around Benidorm looking for the best rate. The euro and internet have put paid to that.
However, some things don't change. When it comes to bank charges and transferring money abroad, the fees can still rack up, making your holiday more expensive than you'd planned.
This week I'm looking at foreign exchange rates, be they for holidays, study trips or gap years.
Whether you're paying with plastic or cash, it's worth remembering that not all currency is the same. The last thing you want when you return home is a big bill from your bank.
*If you're in the Eurozone, things are fairly straightforward, but you can get caught out with unnecessary charges.
Using your debit card is the easiest way to avoid them, but beware of local banks that may charge a cash withdrawal fee.
*Never use your credit card to withdraw cash abroad - even euro - because you will be charged a hefty cash-advance fee for the privilege (see table).
In addition, you'll be charged interest from the moment of withdrawal and your purchases won't be covered by the card's insurance. Better to use it directly to buy goods or not at all.
*If you're intent on using your credit card, load it up with cash before you go. Some banks, such as PTSB, won't charge if you're in credit, but many others will.
The fee is about 1.5pc of the cash amount, but there are pesky minimum charges that apply, so if you absolutely have to use it, don't do it in dribs and drabs as you'll be charged each time.
The cash advance fee can even apply when you're transferring money from one account to another.
UK and Outside Eurozone
*The first rule is to ignore all those signs on currency kiosks that announce "No Commission" or "No Fees" because their fee is built into usually extortionate exchange rates.
The current rate for sterling, for instance, is about €1.15, while a kiosk can charge €1.35 or more.
* Download XE.com for real-time currency rates. Of course, you can expect to pay something extra for the bank's trouble, but any more than a few cent and you're being done.
* Banks charge more outside the Eurozone. You'll pay the foreign exchange fee, which is about 2.25pc, in addition to any cash advance fee for withdrawals and whatever exchange rate the bank chooses.
* Debit cards are not immune. Banks charge for all purchases in non-euro denominations. The Bank of Ireland, for example, charges 2pc (maximum €11.43) on purchases.
* Charges apply online too, so availing of cheap sterling on UK sites may still incur a card charge.
Sending Money Abroad
The most common ways of sending cash are by Western Union (run by An Post) or directly by your bank.
Neither is cheap, but Western Union has the advantage of being instant, so the recipient can collect the cash. However, the charge is eye-watering: €7.50 to send up to €35 and €53 to send up to €1,270.
Others worth exploring include CurrencyFair.com and Transferwise.com, while Ulster Bank has an emergency cash allowance up to €300, even for customers who lose their card.
If there's a chance that you'll want to send money to your son or daughter, set them up as a payee on your account before they leave.
This can take up to a week to arrange, but it means you can effortlessly (maybe too effortlessly) transfer cash to them.
This new Irish start-up is proving very popular with young people. It's essentially a messaging app that moves money between people.
It's handy for holidays or nights out when you want to share the cost of a taxi or a meal but don't have the cash.
An account is set up (in association with MasterCard) on the app and you can pay, say, Mary €10 and John €5.70 as your share of a bill. They can either transfer the money into their own account or use it to pay forward from their own Plynk account.
More than 6,000 people have signed up and the founder, Charles Dowd, says Plynk is expanding into Spain and Portugal.
It's not a retail bank in the normal sense, but it's fully regulated.