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Understanding travel money: what you need to know

If you’re planning a trip abroad, it can pay to be prepared and taking travel money can mean you’re covered for almost any situation. 

But before you exchange money, it’s important to make sure you’ve got your head around how it works. This includes avoiding airport exchanges counters and how to sell any unused travel money.

What is an exchange rate?

An exchange rate tells you how much foreign currency you’ll get in return for your pounds sterling. For instance, a euro exchange rate of 1.12 would give you 1 euro and 12 cents for each pound you exchange. So if you spent £100, you’d get €112 in return.

Exchange rates can fluctuate. Checking the daily exchange rate can help you get the best deal when you want to buy currency. It can also help you decide which countries and regions are good value for money for holidays. But, keep in mind that past performance of a currency is not a guarantee of future performance.

Explore more: Travel money rates

What are buy and sell rates?

Sell rate

This is the exchange rate at which you will be sold foreign currencies. For example, if you're planning a trip to the US, you would exchange your pounds sterling for US dollars at the sell rate.

Buy rate

If you return home with unspent foreign cash, you can sell it back to foreign currency providers in the UK. For example, if you had just returned from Japan and have an HSBC account, you could exchange your yen back into pounds sterling at the buy rate at any of our HSBC branches.

Where should you get your travel money from?

You can buy foreign currency from:

  • banks 
  • post offices
  • bureaux de change
  • currency websites
  • some travel agents and large supermarkets

Spend some time looking at the options available and the varying rates, as well as any associated fees, so you can be sure you’re getting the best deal.

HSBC’s Travel Money has the same exchange rates online and in branch. There are no delivery fees for home or branch orders and the minimum order value is £100.

Why shouldn't you exchange your money at the airport?

While you might think it’s more convenient to buy currency at the airport, it can often be very expensive.

Airport currency exchange counters typically have no incentive to offer competitive exchange rates because travellers who are about to jet off have limited options. Higher operating costs can also be passed on to travellers.

Some airport exchangers charge a service fee that can add up to as much as 10 per cent of the total money exchange. So, in this example, you could lose £10 for every £100 you exchange.

How should you pay for your travel money?

If you use a debit card to exchange your money in the UK, it’s likely that your bank will treat it like any other cash withdrawal, or purchase, so you won’t pay any fees.

If you buy currency using a credit card, however, you may have to pay a cash advance fee of around 3 per cent. In addition, you’ll probably be charged interest on your payment straight away. That’s because foreign currency transactions are handled in a similar way to withdrawing cash on your credit card.

What if you run out of cash abroad?

You can withdraw extra cash from an ATM with your debit card. You can also use your cards to pay for goods and services at shops, restaurants and anywhere else that accepts Visa or Mastercard (depending on your card type).

Fees and charges may apply when you use cards abroad.

What next?

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