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Travelling abroad? Get cheap travel money

Travelling abroad? Get cheap travel money

Category: Travel

Updated: 05/06/2017
First Published: 05/06/2017

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 It is now over 6 months old so the content may be out of date.

Going on holiday is always an exciting time, and it goes without saying that you'll want all that spending money you've saved to go as far as possible. We've got a few ideas to help it do just that, not only by sourcing the cheapest travel money, but by taking advantage of deals and discounts along the way, and making sure you've got the right cards for the job.

Get the best exchange rate

When you're travelling abroad, one of the most important things to remember is that you absolutely must shop around for the best exchange rate. Fail to do so and you could be exchanging at the last minute, and if you exchange currency at the airport, you'll get the worst possible rates.

This is why you need to compare exchange rates and get your travel money before you're actually going to travel. There are plenty of online tools that allow you to find the best exchange rates of the day (just bear in mind that rates fluctuate constantly, so you can never be quite certain when you're getting the best deal – it's a leap of faith), which should always be consulted prior to making your decision.

You may want to look closer at the fine print, too. Post Office Money, for example, pays a better exchange rate the more you want to exchange, so it could be worth seeing if you can boost your budget if you want the best rate. Then there's Debenhams, which is currently offering a free £5 voucher when you buy travel money through them, which could be put towards some of those holiday essentials.

Just bear in mind that exchange rates aren't great at the moment, no matter where you look, as Rachel Springall, finance expert at Moneyfacts, explains:

"Holidaymakers may be in for a shock when they realise their travel cash will not be going as far as before. Last year, buying £200 worth of Euros meant getting €252, and in 2015 they could get €274, but right now it's more likely you'll get €236 – that's a loss of €38 compared with two years ago.

"It's worth taking the time to compare different travel money suppliers to maximise what you can get, and be careful of limits dampening your exchange rate. For example, Post Office Money pay a lower rate if you exchange less than £500, while Debenhams are offering a free £5 voucher on a £20 spend in store when you buy travel money.

"Just remember to compare the exchange rate on these offers to regular alternatives, as the deals with the best incentives may not pay the best rates. Cash isn't stretching as far as it used to, so travellers need to be sure they aren't wasting cash elsewhere either, such as by using their credit or debit card abroad."

Perks of using plastic abroad

As Rachel said, using a debit or credit card abroad can be costly – but not if you use one that's been specifically designed for foreign travel!

"Some debit and credit cards will charge eye-watering fees each time you withdraw cash, so convenience really can cost. Holidaymakers would be wise to instead consider a much more cost-effective card, particularly if they are frequent travellers.

"Creation Financial Services and Halifax have credit cards that charge absolutely no fees when used overseas. Meanwhile, Nationwide's FlexPlus debit card allows free cash withdrawals worldwide, and Metro Bank's current account debit card is free to use to take out cash in Europe."

Many of these boast great exchange rates, too, and as an added bonus, "consumers get protection from theft when using the plastic abroad, which is why using a card can be really helpful", explains Rachel, "whereas if they lost their cash or had it stolen then it would be gone forever!"

As with any credit card, you'll need to use it wisely – interest rates can be high on these cards, so you'll need to be prepared to repay the balance in full when you get back home, perhaps by reserving some of your spending money to pay it off.

Alternatively, prepaid travel cards could be another great option for those who want to flash the plastic but don't want to add to their debt, as Rachel explains: "Consumers hoping to budget their expenses could also consider a prepaid card, as it works like a bank account in the sense that you can only spend what's loaded onto it. If the card is lost, it can be replaced without any loss of money.

"Whatever you choose, try to avoid the 'convenience' of taking and using your everyday card, as this will likely cost you."

What next?

Make your spending money go further by checking out the best travel credit cards (after making sure that your credit rating is up to scratch), or consider a prepaid travel card for complete peace of mind.

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.

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