How can I get the best pound to euro rate while overseas?

Planning a trip to Europe? If so, it’s important to get the best pound to euro exchange rate possible. Karl Talbot shares some tips for doing just that.

Calculator with work documents with the text “How can I get the best pound to euro rate while overseas?” and The Motley Fool jester cap logo

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

If you’re heading to Europe, you can save yourself a pretty penny if you know how to get the best pound to euro exchange rate. So whether you’re planning an escape to the beaches of Spain or the mountains of Italy, here’s how to maximise the value of your money.

Pound to euro exchange rate: common mistakes

Before understanding how you can get the best pound to euro exchange rate, it’s worth understanding the four most common mistakes that travellers make before heading to Europe.

1. Exchanging money at the local Post Office

While often a convenient option, changing your money at your local Post Office is a rookie mistake. That’s because you can often find better pound to euro exchange rates elsewhere, often via online travel money exchanges. Even the Post Office offers different rates on its website than it does in its branches!

2. Falling for the ‘no commission’ trick

This applies whether you’re in the UK or overseas. If you come across a travel money exchange shouting about ‘no commission’, take it with a pinch of salt. While zero commission sounds positive, don’t let it distract you from the far more important exchange rate. Remember, the exchange has to make its money somehow!

3. Using the wrong plastic abroad

It’s perfectly acceptable to use a debit or credit card abroad, as long as it’s a specialist travel credit card. If you use your everyday debit or credit card, you could end up paying hefty non-sterling transaction fees as well as charges for withdrawing cash.

4. Exchanging pounds for euros … for a country that doesn’t use the euro

It may seem ridiculous, but it’s more common than you might think when travellers don’t research their destination. Bulgaria, Croatia, the Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden are all part of the EU but don’t use the euro as currency.

Two ways of getting the best pound to euro exchange rate

There are two rules for getting yourself the best pound to euro exchange rate:

  • Rule 1: Get yourself a travel credit card for overseas use so you can avoid fees.
  • Rule 2: Use a price comparison site to ensure you get the best exchange rate.

Let’s take a look at these rules in more detail.

Rule 1: Get a top travel card

A specialist travel credit card, such as the Halifax Clarity (19.9% APR interest) or the Barclaycard Rewards (22.9% APR interest), charges no fees when used abroad. So spend on this type of card while in Europe and you’ll pay nothing above the near-perfect Mastercard or Visa exchange rate.

Be mindful that while it doesn’t charge fees, the Halifax Clarity card charges interest on withdrawals, so it’s best to spend on the card where possible. To minimise interest on withdrawals, you can pay off your balance immediately while abroad.

With both Halifax Clarity and Barclaycard Rewards you can set up a monthly direct debit to fully repay your balance. For other options, see our top-rated travel credit cards.

It’s worth knowing that some bank accounts offer fee-free overseas use too. Both Starling Bank and the Virgin Money M account won’t charge you any fees to use them abroad, on both spending and cash withdrawals.

Rule 2: Get the best pound to euro exchange rate for cash

As well as getting yourself a top travel credit card, if you want to take cash with you to Europe, it’s best to use the services of a travel money comparison website to compare options.

Travel money comparison sites allow you to specify exactly how many pounds you want to exchange into euros. The best sites will also take into account the delivery fees. Many also allow you to say whether you’d prefer to collect your cash or have it sent to you. If you choose to have your cash delivered, read reviews of the company to ensure it’s trustworthy.

It’s also worth bearing that mind that if you place an order via an online currency exchange, you may not be covered if the company goes bust before you receive your money. While this may seem unlikely, it’s something to be aware of, especially if exchanging a large amount of cash.

Other travel tips to cut the cost of your European trip

Now that you know how to bag yourself the best pound to euro exchange rate, you need to explore other ways to cut the cost of your trip. Check out a list of our latest travel money guides.