Cheap travel money tips

Your travel money options

There are several ways to spend when you’re overseas. Using your normal debit or credit card is rarely the best option, as it will often incur punchy foreign transaction fees and poor exchange rates – so it pays to plan how to spend before you travel.

And, if you’re using a card of any sort, our general advice is to say no to the ‘pay in pounds’ option you’re sometimes offered. Paying in the local currency with your UK card will usually get you a better exchange rate.

1. Travel credit cards

Travel credit cards are popular for international spending thanks to the protection they give, plus they’re usually widely accepted by overseas merchants and venues. Many UK providers offer cards with no foreign transaction fees and competitive exchange rates. You might also get extra perks such as cashback on your spending.

Pros:

• No foreign transaction fees on the things you buy
• Competitive exchange rates
• Can offer fraud protection and buying protection on items costing between £100 and £30,000
• May give you perks such as cashback and rewards points
• Can offer extended warranties on the items you buy with the card
• Offer greater protection than carrying around cash as you can freeze or block your card if lost.

Cons:

• You might be charged interest on cash withdrawals from the date of withdrawal
• Potential for overspending depending on your approved credit limit
• You may need a good credit score to be approved.

You can use our eligibility checker to see which cards you’re likely to be accepted for, without harming your credit score.

2. Travel debit cards

Travel debit cards are linked directly to your bank account and can be used for cash withdrawals and buying things while abroad. Some UK providers offer debit cards that don’t charge you a fee for buying something in a foreign currency.

Pros:

• May allow you to withdraw cash fee-free, up to a certain limit
• Some cards don’t charge foreign transaction fees on the things you buy
• Tend to offer competitive exchange rates
• Can give you extra perks such as cashback.

Cons:

• Daily cash withdrawal limits may apply
• Less buying protection on higher spending than credit cards
• Potential fees for going over cash withdrawal limits
• You might need to pay in a certain amount each month to be eligible for cashback.

3. Prepaid travel cards

Prepaid travel cards let you add money onto the card and use it in the same way you would a normal debit card. Even better, you can load your funds in British pounds and convert them to your chosen foreign currency at a fixed exchange rate. That way you know ahead of time what you’ll have to spend on your trip. Some lenders offer cards with multi-currency accounts, making them flexible for trips to multiple countries.

Pros:

• Lock in exchange rates in advance
• Easy to top up and manage via mobile apps
• Safer than carrying cash, as cards can be blocked if lost on your travels
• No risk of overspending beyond the loaded amount.

Cons:

• May not be accepted by some outlets, such as car hire companies, petrol stations and toll booths
• Fixed exchange rates might not work in your favour if rates improve after loading your money
• Potential fees for withdrawing cash or inactivity on some cards.

4. Exchanging cash before you travel

If you prefer using cash, exchanging it before you travel is often cheaper than doing so abroad or at the airport. Online services and high-street providers can offer better rates, so shop around and buy your currency before you go away.

Pros:

• You know exactly how much cash you have for your trip and can budget accordingly
• No need to worry about overseas card acceptance
• You avoid potential card fraud or technical issues.

Cons:

• Risk of losing cash while travelling
• Less flexibility if you need more money
• You may be offered poorer exchange rates than you’d get with some travel credit and debit cards.

If you do plan to carry cash when you’re travelling, make sure you have a good travel insurance policy in place which may cover you if your money is stolen.

5. Digital wallets and payment apps

Digital wallet apps including Apple Pay and Google Pay can be convenient for contactless payments abroad using your phone. You can also link travel-specific cards to help you avoid foreign transaction fees and get a good exchange rate – just remember to set the overseas card as your default payment option in the app.

Pros:

• Convenient and secure
• No need to carry physical cards
• Quick transactions with contactless payments.

Cons:

• May still involve currency conversion fees
• Relies on the merchant accepting contactless payments
• Dependent on having a charged mobile and keeping this safe.