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3 of the best ways to spend abroad

3 of the best ways to spend abroad

Category: Travel

Updated: 08/07/2014
First Published: 08/07/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Are you waiting for that much-needed summer getaway? You're not alone! The summer holidays are almost upon us and that means a lot of people will soon be jetting off to sunnier climes, but before you start the important task of packing the suitcase, there's one more thing you need to consider – the money situation.

Spending abroad isn't always as simple as handing over your debit card or flashing the cash. Most cards come with extortionate charges when used abroad and cash, as well as not being the most secure, can leave you seriously out of pocket if you don't get the right exchange rate. The pound might be enjoying highly favourable exchange rates of late but you still want to make the most of your money, so to help you do just that here are three of the best ways to spend on foreign soil.

  1. Overseas credit card

Specialist overseas credit cards are different to their traditional counterparts in that they always give you the best exchange rates, and usually without an additional load or exchange fee thrown in. These load-free cards will give you the best rate possible so you actually spend what you pay for, unlike with usual credit or debit cards which will typically add a load of around 3% to every transaction – and will sometimes add on extra charges too.

To really make the most of these cards, however, there are some key rules you need to bear in mind. The first is that the balance will need to be repaid, in full, by the payment date – otherwise the benefits you'll gain from the better exchange rate will be completely wiped out by the interest that'll be added on – and you should only use these cards abroad.

They're only really worth it when you're travelling, as for UK spending you'll probably be able to find cards more suited to your needs (such as those that come with 0% purchase terms, etc.). Look out for withdrawal fees too – while some are designed for foreign use and therefore won't charge too much, it's still worth doing the calculations to see whether it'd beat bureaux de change rates.

What about debit cards? Well, some current account providers offer load-free debit cards too, meaning you can get the same benefits as with an overseas credit card. However, it'll require a complete change of bank account which may not be worth it (if you're considering switching banks you'll probably want to factor in other features too), so if you've already got this kind of account then go for it – but if not, it might be best getting a specialist credit card instead.

  1. Prepaid travel cards

Prepaid travel cards are exactly what they sound like – you load them up with cash before you go, and can spend as you wish! It can be used like a debit card and if you lose it your cash will be protected – therefore being much more secure than carrying around loads of cash – but as the exchange rate is set on the day you buy you'll need to trade off the possibility of it being better or worse when you actually make any foreign transactions.

You can get these cards in a range of currencies to suit your travel requirements, but there are several things you'll need to look out for. While some are completely fee-free, some others might charge you to buy and/or load up, and be on the lookout for those that charge cash withdrawal fees too. It all comes down to doing your research, so check out our pick of the best prepaid travel cards to help make your decision.

  1. Cash

Of course, good old cash will always be your fallback. You'll probably want to bring at least a few notes and coins with you, if only for those must-have souvenirs you've spotted on a market stall, but you need to make sure you get the best price for your hard-earned cash. Comparing exchange rates is vital – will you want to go with a travel agent, your bank, Post Office or even a specialist exchange firm?

Rates will of course change on a regular basis so you'll need to keep on top of things, but be warned – you should NEVER leave it until the last minute and exchange cash at the airport! Airport bureaux de change will always give you the worst rates and you'll be left with far less spending money than if you went elsewhere, so always try to plan in advance to really get the most for your money.


When paying with plastic abroad, you'll be asked whether you want to pay in sterling or the local currency. ALWAYS go with the local currency. It may seem simpler (and therefore cheaper) to pay in sterling but this simply isn't the case – most banks will charge somewhere around 2.99% for non-sterling (i.e. local currency) transactions, but this can rise to as much as 6 or 7% when Dynamic Currency Conversion (DCC) takes place. In this instance, the transaction needs to be changed into sterling and the bank or retailer can add their own charges and exchange rates in addition to those charged by your bank, so it'll cost you a lot more.

What Next?

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.