Foreign Currency in London

Exchanging Foreign Currency in London

There’s no getting around it – when travelling to a different country, be it for business, pleasure or study, it’s necessary to change currency. And sadly, someone’s going to be making money on it. (Hint! It’s not you…). The savvy traveller, however, knows that with a little bit of forward planning it’s possible to ensure that the amount of commission paid is as low as possible, meaning you really do get the best bang for your buck!

So, the first thing you need to know is…

How much is my money worth in UK Sterling?

Currency exchange rates change on a daily basis. Because of this, the amount of Sterling offered by currency exchange providers also changes. The first thing you need to be aware of is the daily rate. This is easy to check using an online exchange rate converter such as XE.com or Bloomberg.   Now, be aware that these are the foreign-exchange (forex) rates, and as such, will not be matched by any provider offering currency exchange – because all make a charge for their service in one way or another. This is known as the ‘tourist rate’. Depending on the currency exchange provider you use, the fee you pay to exchange your money can be very small, or much more expensive.

So let’s take a look at the different options available when it comes to exchanging foreign currency in London, and which you can expect to give you a better rate of exchange:

Foreign currency exchange bureau

Also known as a Bureau de Change – these can be found everywhere in London, especially close to major tourist attractions. It always used to be said that these were one of the worst places to exchange money because of the poor rates. However, the market is extremely competitive, and if you shop around it is possible to find rates of exchange that are average to good. One bureau de change can differ considerably from the next. Some charge more commission than others; others charge no commission but offer a lower rate of exchange. If you must use one, then you’ll be likely to get a more favourable rate from the nationwide providers, such as The Post Office, who have branches all over London.

Other providers you can find on the street that provide a money changing service include:

 

All money exchange providers should display their rate of exchange, and whether or not they charge a commission for their service. You should also receive paperwork with your transactions confirming the rate and how much money you’ve exchanged. If the rate or amount is not obvious, then be sure to ask. Get the provider to write it down if you’re not sure. That way you’ll be clear as to exactly how much money you’ll be receiving for your currency.

At the Airport

Yes, you can exchange currency here, but airport exchange booths are notorious for giving a very poor rate of exchange if you simply turn up and hand over your cash. If you want to pick up Sterling in this manner, it’s best to pre-order through a company such as Travelex. That way you’ll get more sterling for your money, or you can even get it delivered directly to your door if you know your address in London.

At your Hotel

Most hotels offer a money changing facility. But once again, this is not where you’re likely to get a favourable rate.

Using an ATM

Having a credit or debit card that you can use to withdraw money from local ATMs is one of the best ways to ensure you get a good exchange rate. Getting local currency in this manner ensures that you get the bank’s rate, and not a third party providers. However, be sure to check with your bank before you leave home if they make a charge for this. Some banks do, and others don’t – so it’s important to ask the question before you leave home.

In the UK, an ATM machine is generally referred to as a ‘cashpoint’. When you withdraw money from one of these, be sure to take the same precautions as you would do at home – such as hiding your PIN number as you tap it in, ensuring no-one is standing too close and making sure to memorise your PIN, rather than writing it down.

It’s also advisable to let your bank know that you’ll be travelling abroad, so that they don’t flag up your account as having ‘suspicious’ activity in foreign lands.

One thing to be aware of is that some ATM machines make an additional charge when withdrawing money. These tend to be small ones that are found in corner shops, or perhaps in bars or pubs. To avoid paying such a fee, ensure you use an ATM that advertises that it doesn’t charge for cash withdrawals. ATMs at major banks all provide cash without a fee – such as those at HSBC, Barclays, Lloyds and Halifax.

Pre-paid travel cards

An alternative to a debit or credit card is a pre-paid card. This is one that you load up with cash before you leave home, and then use it in the UK to withdraw cash or pay for goods in exactly the same way as you would with a debit or credit card. These can be purchased from various providers, including Travelex, who offer the Cash Passport Prepaid Currency Card, or the Travel Money Card from the Commonwealth Bank of Australia. In many instances, this is a great way to avoid charges your bank might impose for using your debit card, but still allowing you to benefit from a decent rate of exchange.

Automatic conversion when buying goods

When you use your credit or debit card to purchase goods or services, you may find that you’re asked if you want the transaction carried out in Sterling, or in your own currency. Always ask for it to be in Sterling, as you’ll then benefit from your bank’s more favourable rate of exchange, rather than that of the card provider.

And one last proviso… Don’t withdraw money from a bureaux de change using a credit card. Such a transaction is treated in exactly the same way as a cash withdrawal – with the respective fees and instant interest being charged.