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How to get the most out of your travel money

How to get the most out of your travel money

Category: Travel

Updated: 21/08/2014
First Published: 21/08/2014

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 It is now over 6 months old so the content may be out of date.

Over two million British holidaymakers are set to head overseas during the August Bank Holiday, 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 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 best exchange rate. The pound may be enjoying favourable exchange rates of late but you will 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.

Overseas credit card

Specialist overseas credit cards are different to their traditional counterparts in that they always give you the best exchange rates, 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 standard credit or debit cards, which will typically add a load of around 3% to every transaction as well as extra charges.

However, to really make the most of these cards, there are some key rules you need to keep 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, second, you should only use these cards abroad.

Overseas cards are 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). 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 they beat bureaux de change rates.

What about debit cards? Well, some current account providers offer load-free debit cards, meaning you can get the same benefits as an overseas credit card. However, it may 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), so if you've already got this kind of account, then go for it – but if not, it may be better to get a specialist credit card instead.

Prepaid travel cards

Prepaid travel cards are exactly as they sound – you load them up with cash before you go, and then spend as you wish! It can be used like a debit card and if you lose it, your cash will be protected. This is 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 a foreign transaction.

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, others may 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 you make your decision.


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 – 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 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?

Compare the best Travel Credit Cards in our best buys charts.

Compare the best Prepaid Travel Cards in our best buys charts.

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.