Europe is a popular travel destination for Britons wanting to get away. But how can they judge what the best euro exchange rate is? In this article we examine:
- How to use the Pound to Euro mid-market rate
- Where you can get the best euro exchange rate
- Countries in Europe that do not use the Euro
- Extra charges when buying foreign currencies
Using the Pound to Euro mid-market rate
The mid-market (or interbank) rate is halfway between the wholesale buying and selling rates for different currencies. It is what banks use when they sell or buy euros or pounds, for example. You’ll be able to find it online or in the press.
Although you won’t get this price for your sterling to euro/euro to pound purchases, you should use this price as your base-line. It will give you an indication of how good the exchange rate is. The pound to euro rate you actually get will depend on where you buy your currency.
Where can you get the best euro exchange rate?
The one place you definitely shouldn’t buy your travel money is from kiosks or shops located in travel hubs such as airports. They may be conveniently located if you’ve left your currency purchases to the last minute but you won’t get the best pound to euro rate.
The best place to buy euros is from High Street banks or from online currency specialists. Both have their pros and cons.
The one place you definitely shouldn’t buy your travel money is from kiosks or shops located in travel hubs such as airports.
High Street banks allow you to collect your euros immediately without paying extra for delivery. However, online sites tend to offer a more competitive pound vs. euro rate. Also, you can compare exchange rates easily without trekking from one place to another.
Countries in Europe that do not use the euro
The following countries are EU members but do not use the euro as their official currency:
Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Lithuania, Poland, Romania, Sweden, and the United Kingdom.
Additionally, the following countries within Europe also do not use the euro:
Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Georgia, Iceland, Kazakhstan, Liechtenstein, Republic of Macedonia, Moldova, Norway, Russia, Serbia, Switzerland, Turkey, Ukraine.
What extra charges can you expect when buying foreign currencies?
There are a number of additional expenses you should allow for when buying money for your travels.
Commission fees are paid as an administrative or handling charge for the financial transaction. You may see that the company advertises ‘Free commission’. If so, you’ll probably find that the euro exchange rate is much less competitive as this fee is included in the price.
When you order euros online, you may also be charged a delivery fee to have the currency sent to your home/work address. You can avoid these fees by picking up the euros from your nearest branch. If you pre-order large sums, the firm might waive the fee.
Credit card fees
Providers of foreign currencies will often charge a transaction fee of around 3% if you pay for your pound to euro purchases by credit card. This will be in addition to the extra fees and interest charges imposed by your credit card provider.
You must take account of these factors when buying foreign currency. The easiest way to compare exchange rates is to ask ‘How many euros to the pound will I get in my hand?’ (i.e. after all the charges).
This question – along with a comparison with the mid-market rate – will ensure that you get the most competitive sterling/euro exchange rate.
How do I find the best pound to euro exchange rate?
You may find the best pound to euro rate by comparing all available foreign currency providers.
Do I need to declare how much money I’m taking in or out of an EU country?
While travelling within the EU, it is not mandatory to declare how much money you’re taking in or out of the country.
Can I get a better exchange rate on the High Street?
Typically, online sites offer more competitive pound vs. euro rates. However, you may collect your euros immediately from a High Street bank without paying extra for delivery.
How many euros can I buy in the UK?
For each transaction of pounds to euros, most providers in the UK allow you to order up to £2,500 worth of euros.
Should I buy euros now or wait?
Since there is no way to know whether you would be offered a better exchange rate in the future, it is up to you to whether to exchange now or wait.
Can I buy euros with a credit card?
Whereas it is possible to buy euros with a credit card, this is not recommended as you will charged by both the travel money provider as well as your credit card provider.
What is commission and can I avoid this fee?
Commission is the fee that is typically charged by a travel money provider as part of the service for exchanging your pounds into a foreign currency.