Foreign Exchange: How to change currencies when you go abroad

by Peter Lavelle
Posted on 1st June 2012

If you go abroad, there are two ways you can change currencies before you leave:

1. Like it's a holiday, so you get just enough foreign currency to see you safe while you're there.
2. Like a full-scale relocation, in which case you move all you savings to a bank account abroad.

Depending on which method you choose, the best method of getting a great foreign exchange rate changes.

The vacation method

If you choose to change just a little bit of money to have with you abroad, then you'll be changing currencies the same way as people who go on holiday. In which case, here is how to get the best exchange rate at the lowest fees:

1. Avoid the airports. These provide the worst exchange rates, and so are a terrible way to get foreign currency.
2. Avoid using your usual debit or credit card abroad. This subjects you to constant fees and penalties, including when you use your card in a shop and when you withdraw cash.
3. You can find good exchange rates using a comparison site like or Beware though, because if you get your cash using your normal debit or credit card, you could be charged an additional fee, while it's of course always possible to lose cash, which makes it a risk.
4. You get the best exchange rates and lowest fees using specialist plastic. For instance, the Halifax Travel and Post Office credit cards charge none of the fees associated with normal cards. The only proviso is you must pay off everything you use at the end of the month to avoid a hefty interest rate. Alternatively, pre-paid cards such as those from Caxton FX offer the best exchange rate, no fees, and can be replaced if you lose them for about £10.

With these tips, you should be able to get the best deal if you're taking just a little bit of foreign currency.

If on the other hand, you decide to move your savings to your foreign bank account, you'll be better off changing currencies with this second method:

The emigration method

If you decide to transfer all your savings when you start work abroad, you need to change currencies the same way as people that emigrate or buy a second home. Here's how to do it:

1. Find a foreign exchange broker directly authorised by the Financial Services Authority such as ourselves.FSA authorised brokers adhere to strict legal requirements to protect client monies, meaning your funds are safe. Those that don't adhere (such as the new defunct Crown Currency) can be a risk.
2. Tell the broker your circumstances. It goes without saying that foreign exchange brokers provide better exchange rates than either bureaux de change or high street banks. Talk to a broker though, and you can find out what method of moving your funds is best for you.
3. Consider a forward contract. If you're not starting your mission for some time, you might consider locking in the present exchange using a forward contract. This fixes the exchange rate, protecting you against declines in the rate later to the time.

This will enable you to get an exchange rate up to 3-4% better than a bank, which obviously makes a big difference if you're moving a large sum. However, foreign exchange brokers generally only deal with sums larger than £5,000, so be sure you have this amount before getting in touch.

I do hope that answers your questions about moving money abroad. Of course, if you have any questions about this process I haven't answered in this post, please don't hesitate to contact me at foreign exchange specialist Pure FX. I'd be delighted to provide an in-depth answer to your query, free of charge.

Peter Lavelle is a broker at foreign exchange specialist Pure FX. If you have any questions about the methods mentioned in the article or anything else related to changing currencies, contact him through the foreign currency exchange Pure FX and he would be delighted to provide an in-depth answer to your query, free of charge.