Foreign Currency

Foreign exchange and what to look out for when buying foreign currency

If you are travelling abroad, it is likely that you will need to take some money in the country’s local currency with you. There are many providers that allow you to buy and sell foreign currency electronically, on currency cards, and in the form of cash.

The price you pay for foreign currency depends on the exchange rate offered. When buying foreign currency, you will likely be required to pay a fee and/or commission. The exchange rate and the fees that you will pay will vary depending on which provider you go to. Therefore, it is important that you check what, if any, transaction fees apply, as this will impact the total price that you pay.

Most foreign currency providers will provide a ‘we sell’ rate – which is the rate that you can buy foreign currency from the provider (e.g. from sterling to euros before you travel to Europe), and a ‘we buy’ rate which is the rate you can sell your remaining foreign currency to a provider (e.g. from euros to sterling after a holiday).

As an example; when buying euros, the ‘we sell’ exchange rate might be 1.1436, which means that you would receive 114.3 euros for every £100 that you exchange. If the ‘we buy’ rate for euros was to be 1.34 this means that for every 134 euro you exchange, you would receive £100.

Using these rates, it would mean that a person travelling to France exchanging £500 would receive about 571 euros. However, if they returned to Guernsey from France and did not spend any of the money that they originally exchanged, and wanted to exchange the euros back into sterling using the ‘we buy’ rate of 1.34, they would receive only £426, despite not having spent any money. Therefore, keep in mind that you are not guaranteed to get the same amount or value when a provider buys back any travel money that you have not spent. It is also important to remember that foreign currency providers might charge commission and other fees and charges for foreign currency transactions; you should consider these costs as well.

Where you can purchase foreign currency or currency cards:

  • Banks
  • Post Offices
  • Online specialist websites
  • Some travel agents


Top 5 Tips when purchasing foreign currency

  1. Buy your travel money in advance - Normally, the bureaux de change at airports, railway stations, and ferry ports are more expensive than high street and online providers.
  2. Beware of buying foreign exchange with your credit card – Using your credit card might incur interest charges, even where you pay off the amount in full every month. You may also face charges and fees from your card and travel money provider. Therefore, you may wish to contact your credit card provider and ask about the fees and charges that might be incurred before carrying out the transaction.
  3. Do your research – There are many different foreign currency providers, so you may wish to do some research and shop around for the best deal. Foreign exchange providers will be able to show you how much you will get for your money once the exchange rate and any charges have been taken into account. Make sure to ask upfront about fees and charges payable.
  4. Call ahead - If you are planning to buy a large amount of cash, or a less commonly purchased currency, call ahead to check that they have the cash available or will be able to order it for you.
  5. Estimate the amount you need to exchange before you go - You are not guaranteed to get the same amount or value when a provider buys back any travel money that you have not spent, so you might not want to exchange more money than you require.