Dollar/Pound

This is kind of a fun question but also a little silly. Most travel plans are made months in advance so a few percentage point swing in the value of the dollar has little impact. If the value is going up, then I may be tempted to splurge a little. If going down, probably tighten up a bit here and there. We recently decided to go to Spain over New Years and are currently planning a month to six week trip in October 09. No way to anticipate or factor in the changing value of the dollar -- just keep hoping the value increases.

I just traveled there and exchange rate does make you feel better about the cost of everything. One B&B did have a cancellation while we were there due to stock market drop.

Glad to hear a first hand report of the change making a difference. The ratio is now bouncing up and down. I am thinking of buying pounds in advance of my March trip. Is this a good idea, in your opinion?

I don't think it is good idea. First, is all probability you will a premium of 6 - 10% to buy pounds in the US. So that means you have to have an equal increase in value just to break even. Not likely between now and March. And it just might continue to go down. It is a dice roll and you will lose most of the time.

I hope you are correct. Looks like the dollar may have gained ground today.

The pure exchange rate can be a red herring regards budgeting although of course every little helps.
In London most first time North American visitors can save a lot more by getting some basics right at the start. Not tipping like in North America will save you 10-15%, not staying in a 'downtown' hotel where you pay a 20-30% premium. The concept of 'downtown' doesn't apply in London, sights are spread out and you'll use public transport wherever you stay. Currently the agents and airlines are keeping hotel rates artificially high despite getting lower rates from the hotels - you'll get a much better rate at the moment dealing direct than the likes of Expedia.

We went to Scotland in May when the exchange rate was just awful. Since I am in my 50s I feel like I should not postpone travel based on exchange rates because there is no telling how long we will be able to travel, especially as we do now -- lots of walking and hiking. However, with the stock market down so much, I feel like I can't totally disregard the exchange rates. Next year, I'm thinking of not planning so far ahead and basing the destination on where we can get the best airfare and where it looks like the exchange rate will be the most reasonable (this obviously requires guess work). The airfare will probably be the bigger determinant.

As for changing dollars into other currency in advance of the trip, I can't see it. You're losing interest on the money all that time, and as someone pointed out, you'll get a worse exchange rate. Then, where do you put the currency -- hopefully not in your mattress. Since I don't have a safe or safe deposit box, that's another reason not to do it.

We used cash for as many purchases as we could to save on fees. AMEX however doesn't charge a fee for an international transaction, but Mastercard does. So we would usually withdraw 100 pounds every other day or so for cash. Worked like a charm, never had a problem with any ATM machines in London. We traveled this recent September, when the dollar was $1.75 to the pound. It's now down to $1.50 to the pound. Prices were high for everything except rasberries, which were "Product of UK" and big and delicious! A good sized container for GBP1.99 at the local Waitrose. We bought many of these!! The cut pineapple was also delicious, product of Ghana. Overall, we didn't find the prices in the UK any higher than they are in Japan. And the one-week Oyster card, for GBP24.20 was a bargain, we found.

We use Capital One Visa card for everything. It is the ONLY no-annual-fee card that does NOT charge a conversion fee. (Amex does not charge the fee, but you have to pay an annual fee for an Amex card.)

So, when you use the Capital One visa you will not be charged a fee for converting the charge from pounds to dollars.

We use cash as little as possible - but, like others, I would also recommend exchanging currency when you get there - a little every few days as needed.

The dollar/pound ratio was around $1.50 to the pound yesterday. This makes London more affordable. What is its lowest in your experience?

Terry&George, actually the AMEX Blue is a no-fee card. You're thinking of their Gold card, which is not a credit card, but a charge card with a yearly fee. I don't use one of those.