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Make your travel money stretch further

Category: Travel
Author: Tim Leonard
Updated: 01/08/2018

Travelling can be an expensive business, so it's vital you're able to make the most of your travel money. Here's how.

1. Take a combination of card and cash

When travelling, it's best to take a mixture of cash and card to make sure you're not left short if a retailer/vendor doesn't accept card payments, or if you don't have enough cash to cover a big purchase.

2. Get a traveller-friendly card

Most credit cards and debit cards will charge extra fees when you spend abroad, but some don't. Check our Travel Credit Cards or Prepaid Travel Money Cards Best Buys for the top traveller-friendly cards around. Prepaid Travel Money Cards (where you pre-load money onto the card) are available in Sterling, Euros or US Dollars, among a number of other currencies.

3. Don't assume it's cheap to spend on your debit card

Most debit cards charge a fee when you spend in another currency, so it's worth checking this before departure. It could work out cheaper to pay with a 0% commission credit card and then pay off the balance in full when you get home.

4. Don't buy currency on your credit or debit card without checking

Credit card providers tend to treat this as making a cash withdrawal. That usually means a fee, and a higher rate of interest charged from day one of the transaction taking place – it's very expensive. Alternatively, take cash out using a debit card and buy using that, or change less cash and use a traveller-friendly card to make purchases abroad.

5. Check before withdrawing cash abroad using a credit card

Cash withdrawals from a credit card can be hellishly expensive. There are a few that allow you to do this with no extra fees, but these are the exception rather than the rule. The same applies to debit cards, so make sure you've got a specialist travel card if you think you'll need to make withdrawals.

6. Travelling outside of Europe? Consider taking a Visa as well as a MasterCard

Although it's not always the case now, Visa is traditionally a more universally-accepted card outside of Europe than a MasterCard. Taking both means that you should be able to pay by card, wherever you go.

7. Don't pay by card in £s

Local retailers may offer you the option to pay in sterling on your card rather than the local currency. While this can be appealing as you know exactly what you're spending in pounds and pence, it's also expensive. That's because something called Dynamic Currency Conversion is applied, which effectively means that you're paying over the odds for the privilege of paying in pounds. Always pay in the local currency – if you want to know how much something is approximately, make a note of the exchange rate before you go.

8. Commission-free travel currency isn't necessarily cheapest

Compare exchange rates and factor in any commission that would be charged. It's often the case that even with commission you can get more for your money than a provider that offers commission-free currency exchange.

9. Don't buy currency at the airport

You'll pay a premium if you do. Sort your currency exchange before you get to the airport, or even locally when you arrive at your destination. Again, have in mind what a competitive exchange rate is to make sure you're getting a good deal.

10. Travellers' cheques give peace of mind, but you pay for it

Travellers' cheques allow you to carry currency securely, safe in the knowledge that if you lost them or were robbed, you would be able to get your money back. However, in comparison to cash, you will pay a bit more for this peace of mind and they're not available in some currencies.

What next?

Compare the best use abroad credit cards
Compare the best prepaid travel money cards

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.