The Cheapest Place To Get Your Holiday Cash

The trick to cheap travel money is to order it in advance. But where is the best place to get it?

So you've booked your summer holiday. Lucky you! Now you need to think about your spending money.

You may be planning to buy your currency at the airport, just before you leave for sunnier climes.

But unlike holidays -- where last minute deals can mean huge bargains -- buying holiday cash at the eleventh hour can prove a costly mistake.

If you want cheap spending money, the trick is to order it in advance. But where's the best place to get it?

Cheap Currency

Buying currency these days is usually commission-free, so it's more important than ever to compare exchange rates and charges. Here goes:

Exchange Rates - € Euros (for £1)

*Can only be ordered online by Lloyds TSB customers through internet banking.

Exchange Rates - $ Dollars (for £1)

*Can only be ordered online by Lloyds TSB customers through internet banking. Rates correct as of 30/05/08.

Thomas Exchange Global came out on top for cheap Euros and US Dollars, while the bureau de change I visited in the west end of London was very poor value for both exchange rates and commission charges.

Bureaux de change may be convenient for getting your currency instantly, but don't expect great rates. Travelex, for instance, are pretty competitive if you pick up currency from one of their airport bureaux which you have ordered online in advance. But if you haven't ordered in advance and buy there and then in the airport, the exchange rates are usually much lower, making your currency expensive.

When it comes to home delivery, most orders are only free if you buy at least £500 worth of currency (or £300 from Currency Express).

So if you don't plan on taking much hard cash away with you, pay particular attention to the small print on fees. Otherwise, the delivery costs could wipe out the savings you have made on a good exchange rate.

That's why, for small quantities of foreign money, it's probably better to order in advance, but collect the currency yourself.

Alternatively, pop down to Marks & Spencer. The high street retailer recently began offering commission-free Euros and US Dollars in cash machines at forty M&S stores.

Of course, hard cash is not the only way of spending while you're on holiday. You may also want to consider these alternatives:

Travellers Cheques

Travellers Cheques can usually be replaced if they are lost or stolen, so are a safe alternative to cash if you don't want to carry around lots of money. They can be cashed in banks all over the world and do not expire.

But remember, some places -- such as Currency express and Marks and Spencer -- charge commission on cheques. And, on top of that, you may have to pay commission when you cash cheques abroad.

Travel Money Cards

These cards are a new way of spending on holiday, which can be used just like your debit card but without being linked to your bank account.

You can use them for purchases abroad and for withdrawing cash at ATMs. Travel money cards are pre-paid, loaded with your spending money, which you can top-up whenever you need to. What's more, you won't have the hassle of cashing travellers cheques and they're more secure than cash.

Most cards can be loaded with Euros, US dollars or Sterling. Here's a very quick guide to some of the cards currently on offer:

*Extra ATM charges may apply abroad too. ** Also available at Thomas Cook & Co-op Travel. *** The Post Office offers more competitive exchange rates on its Travel Money Card and travellers cheques, which beats the rates available on currency until mid-July.

But how secure is cash loaded onto a travel money card?

Travelex say its Cash Passport is just as secure as travellers cheques. Similarly, your money is protected if your Post Office Travel Money Card is lost or stolen.

However, FairFx say its Currency Card should be treated as cash, which means you would lose your money if you lost the card. Bear this in mind before you choose a card.

What about exchange rates? Typically, rates are the same whether you opt for currency or cards. But, interestingly, FairFx actually offers better rates on its Currency Card -- €1.2575 and $1.9525 -- which are the best rates on the market.

Planning to use a credit card on your hols instead? Read The Best Credit Cards To Use Abroad.