How To Get The Best Travel Cash & Cards

Posted on: 23 January 2009 by Gareth Hargreaves

With the UK economy in recession we discover ways to get hold of the best travel cash, cards and travellers cheques.


There's a number of ways you can end up losing out when you buy your foreign currency or make financial transactions abroad. But use our easy-to-follow guidelines and you will get the most out of your holiday money.

Cash Or Cards?

If you hold a current account or credit card with one of the major providers, the likelihood is that you are getting charged over the odds on all withdrawals and transactions you make abroad.

So if you travel frequently, you should consider setting up a Nationwide current account – and either a Nationwide or Post Office credit card – to use abroad.

In the meantime you'd be better off buying currency in advance and taking cash, and most people like to arm themselves with a bit of local currency before arrival.

Best Places To Buy Currency

First, under no circumstances wait until the airport - you will get a poor deal. Second, most providers now charge no commission, so reject any that does - the best now compete on exchange rate.

On the high street, a recent Which? report found the best rates were offered at Chequepoint (£400 for €500) and Thomas Cook (£404.86). Old favourites like Marks & Spencer and the Post Office (£419.36) fared less well.

The best online rates are offered by ICE, Travelex and Saga (both £404.47). ICE delivers free for amounts over £300. Travelex allows you to collect your currency without charge at their airport branches – just make sure you leave yourself time to do so - while Saga runs a home delivery service.

Best Debit Card To Use Abroad

The answer is - Nationwide's Flexaccount Visa debit card. Why?

Most major banks make significant charges on cash withdrawals overseas. Halifax, LloydsTSB, Natwest and RBS are all particularly bad offenders.

Typically, for debit-card cash withdrawals, you will pay a fee of around 2.5% - with a minimum of £2.50, and the bank will also 'load' the exchange rate so that you're effectively paying a commission of 2.75%.

Nationwide does not charge for withdrawing cash and it does not load the exchange rate. Moreover, the rate used will probably be better than even the best forex bureaux at home, so this overall is the cheapest way to spend.

You need to open the Flex account with Nationwide – but you don't have to make this your main current account. You can open one, leave it idle, and feed money into it before going away.

As for using debit cards to make purchases or pay for meals abroad; this is sometimes worse value than making a large cash withdrawal. If you want to pay by card, you are better off with a credit card, as long as it's the right one.

Best Credit Cards To Use Abroad

The answer depends on whether you will pay off the balance in full when you return. If so, Nationwide, Post Office and Abbey Zero are the best bets because they do not load the exchange rate.

If not, it is better to go for the lowest-rate card for general spending: It is generally inadvisable to use credit cards to withdraw cash, whether at home or abroad, except in urgent circumstances.

With any card transaction, resist the offer of so-called 'dynamic currency conversion'. Vendors or cash machines increasingly ask 'do you wish to be charged in sterling (GBP)?' Always say 'no'.

Traveller’s Cheques

Traveller's cheques have been largely superseded by cash and cards. They could come in useful in two cases however:

  • If you do not want to use cards but also do not feel secure carrying cash.
  • For the United States. American Express US dollar traveller's cheques are accepted by many retailers, hotels and restaurants in the US as a form of cash. You will receive change in cash, and be charged no commission.

Travellers cheques are a safe choice as they will get refunded and/or replaced if they are lost or stolen.

Remember to keep your receipts separate from the cheques as the receipts contain your traveller cheque numbers, and tell you what to do if you need to get a refund.

Do you have any financial travelling tips? Where and how do you change your travel money?

Let us know by leaving a comment in the box below or share your thoughts with other readers in the 50connect forums.

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