Glossary – useful currency terms. Courtesy of www.currencyexchange-uk.co.uk

ATM

Automated Teller Machine.

Commission

Additional charge applied when purchasing travel money, in addition to the exchange rate charge, paid to the bank or foreign exchange broker

Currency

The lawful monetary denomination of a specific country / region

Currency card

Currency denominated card, designed for travel purposes and typically prepaid. Foreign exchange rates will be applied at the time of loading, and the cards incur lower commission fees at ATMs and PoS transactions than credit / debit cards

Currency exchange rate

The number of units on one currency required to buy or sell one unit of another currency.

Dynamic currency exchange

If you are offered to pay in pounds when abroad, rather than the local currency, you are being offered a dynamic currency exchange.

Euro

European monetary union currency, created in January 1, 1999 but considered legal post January 1st 2002

Forex

Abbreviation of foreign exchange

Forward contract

Forward contracts are used in international money transfers, and they allow you to fix an exchange rate for up to two years in advance. By using a forward contract you can pre-book this transfer for the correct date but at the current exchange rate.

FX:

Abbreviation of Foreign Exchange

FX Conversion Fee:

This refers to using the card in another currency other than that in which it was issued. So for example spending on a Euro card in say the UK which uses pounds sterling.

International Money Transfer

The movement of funds from one currency and location to another currency and country.

Limit Order

Limit orders allow you to set a limit on the exchange rate at which a transfer will occur, and is another option when sending money abroad.

Purchase Fee / Point of Sale fee (PoS)

Most Travel FX cards do not charge a fee for using the card to buy or pay for something – this is one of the major advantages of the card.

Top Up / Load fee

How and where you top up a travel money card can sometimes accrue a small fee. Most cards usually have a number of methods that are free – so try to top up in this manner and check the individual card details.

Travellers Cheques

Denominated cheques designed for travel, requiring a signature on purchase and redemption as well as proof of ID.

Travel money

The money you take abroad with you, either as traveller’s cheques, currency cards, or foreign currency cash as well as your standard debit and credit cards.