Instead, banks take their cut through a mechanism known as exchange rate loading. This involves giving the customer a poor exchange rate when converting the value of any overseas transaction back to sterling.

In finance, an exchange rate (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.

Check out the Top 5 best Apps for Currency Conversion.

1. Oanda

Oanda, much like XE, is a full-fledged finance company perfect for high-powered users. The app, available for free on iOS, Android, BlackBerry, Windows Phone 7, Playbook and on the web, will convert more than 180 currencies and four metals. The app also displays buy and sell rates for currencies, and even lets you use an Interbank rate or choose percentage add-on to figure out how much your bank or credit card company is actually charging you.

Lest that sound like too much, the app also stores your previous searches so you can quickly access frequently-used currencies. You can also search through obsolete currencies for when you're curious or stuck during a pub quiz. Download: Oanda

2. Currency Banknotes

Currency BanknotesBy TechiXoft: Try Currency Banknotes for iOS which, for $0.99, will calculate more than 150 currencies as well as give you visual representations of that cash. While this might seem like a frivolous addition, knowing what money is supposed to look like can help you from getting ripped off. It's also a nice feature for people who wonder what $5 looks like in Taiwan. Currency Banknotes also has pictures of rare and hard-to-find banknotes if you're curious while on the go.
Download: Currency Banknotes

3. XE Currency

XE is one of the obvious choices for currency conversion. The finance company has managed to package their website's suite of tools into a cute little mobile package. The app is available on iOS devices, Android, BlackBerry and Windows Phone 7 for free. Mobile currency rates & charts XE Currency app for iPhone, Convert every world currency on-the-go with the universally optimized XE Currency App for iPhone and iPad. Featuring live currency rates and charts, this FREE and simple currency calculator has received over five million downloads, and was featured by the BBC, the LA Times, CNN, and The Travel Channel!
Download: XE Currency

4. Currency

For someone looking for an equally powerful but more streamlined app experience, Currency is a good bet. The app can calculate more than 100 world currencies and works in 17 different languages. Currency is available on iOS, Android and webOS for free and is great if you need to figure out a rate in a pinch. Download: Currency

4. Quid

Quid - Currency Converter, automatically retrieves daily exchange rates for 180+ world currencies. You may add more currencies as needed. For these you will need to manually enter exchange rates.
Download: Quid