Money abroad

You may have booked your holiday and think that all the boring money stuff is over but then you start thinking about how to pay for everything when you’re away. There are the questions about exchange rates, whether to take cash or use a card, which card to use – credit, debit, prepaid cards…

Sometimes it can all feel a little overwhelming but here are a few tips to help you through it all:



  • Accepted almost everywhere.
  • No transaction fees.


  • Unsafe carrying large amounts.
  • Investigating exchange rates can be time-consuming.
  • May be difficult to source uncommon currencies.
  • Inconvenient if you’re left with cash after your trip.
  • No protection for purchases over £100 under the Section 75 Consumer Credit Act.

Credit and debit cards


  • Offer more protection than cash if stolen; can be cancelled and fraudulent activity can be identified.
  • Convenient as you’re not left with excess cash.
  • Credit cards offer protection on purchases over £100 under the Section 75 Consumer Credit Act.
  • Specialist travel credit cards with no FX fees can offer better exchange rates than you can get at bureaux de change.


  • Not accepted everywhere.
  • Can be expensive to use (see “Using your credit or debit card abroad” below) with various charges.

Prepaid cards


  • Offer more protection than cash; they have a PIN, can usually be blocked if stolen and the balance transferred to a new card.
  • Not linked to your bank account so if stolen, only the amount on the card can be spent.
  • Convenient as you can hold multiple currencies on one card.
  • You know what the exchange rate is upfront.
  • Easier to stick to your budget!


  • There are often limits on how many transactions you can make each day e.g. 2 cash withdrawals.
  • There are sometimes application or monthly fees.
  • Not accepted for deposits e.g. hiring a car.
  • No protection for purchases over £100 under the Section 75 Consumer Credit Act. 

Most travellers find that they’ll take a combination of these options; perhaps some cash for taxis or tips, and a specialist travel credit card for all other spend. Let’s explore these in a bit more detail… 

Image by Sharon McCutcheon/Shutterstock

Using your credit or debit card abroad

If you use your normal credit or debit card whilst you’re abroad, you are likely to pay for it. They often come with additional charges, which include:

  • Exchange rates: An additional exchange rate called a ‘load’, which amounts to around 3%, is applied by both the card issuer and card provider in addition to the basic wholesale exchange rate.
  • Cash withdrawals: Both credit and debit cards normally charge a fee for cash withdrawals, amounting to around 2.5%, with a minimum charge of about £3. Foreign banks also often charge a fee for using their cash machines although rates can vary so it’s best to do some research. Some credit cards can also charge interest on cash withdrawal balances even if the credit card is paid in full at the end of the month.
  • Card fees: Some debit cards come with a fee every single time you use them abroad so ensure you check with your bank first before using them.

However, you don’t have to put up with these charges, there are a variety of specialist travel credit and debit cards out there which don’t penalise you for travelling! Check out MoneySavingExpert which has some great information on the best ones available. It just takes a bit of time to plan in advance of your trip but could save you £££’s so it’s definitely worth checking out and giving yourself time to complete the application process before travelling. You can also use these to make purchases on foreign websites.

  • It’s worth calling your credit or debit card provider before you go abroad to let them know you’ll be using the card overseas; this should prevent any awkward situations with your card getting blocked or rejected. If this does happen whilst you’re away, be sure to call them as soon as you’re able to. 
  • If you’re unable to get a specialist travel card before travelling and are taking your existing card instead then you can check whether your bank has “partner banks” in the country or countries you’re travelling to. These are banks that have an agreement to offer fee-free or low rate withdrawals to overseas visitors.

Exchange rates on credit and debit cards

  • Do you ever wonder which option to choose when you’re paying for something in a shop abroad or withdrawing money from a cash machine; pounds or euros, dollars or pounds…? If you choose pounds, the retailer does the exchange; if you choose the local currency, your card provider does the exchange. Your card provider generally provides better rates than retailers so it’s usually best to go with the local currency option, especially if you have a specialist travel card.
  • Either way, the rate you see that day may change due to the delay between the transaction and it actually being processed. During this time there are fluctuations in exchange rates which mean you may pay more, or less, than the price you see on that day.
  • There is a way to get round this though…if you’re concerned about fluctuations in currency then search for prepaid cards which enable you to convert your pounds into dollars before you travel. This will at least ensure you know the rate you’re getting before you travel, although you won’t necessarily know if this is a better or worse rate than what you’d get when you’re there.

Exchange rates on currency

When it comes to cash, it’s best to think about your options before travelling rather than making a panic decision about getting currency when you arrive at the airport.

  • If you’ve decided to withdraw currency using a specialist travel card, then you’re better off waiting until you arrive at your destination
  • Hotels often offer poor exchange rates so it may be better to convert your cash before getting there.
  • You may decide that you’re not going away for some time, but the pound is strong against the dollar or euro and you’ll get more for your money converting now. Just remember that exchange rates fluctuate and no one really knows what’s going to happen with them for certain.
  • Bureaux de change are not protected so ensure they don’t have your cash for longer than required if, for example, you’re ordering online. If they go bust whilst holding your money you may not get it back.

Image by Josh Appel/Shutterstock

Practical tips to keep your money safe abroad

Credit and debit cards are generally safer than cash but you’ll probably need to take cash for some items. If you are using cash, then keep your money safe when you’re out and about;

  • Stay alert, especially when you’re in crowded spaces, and keep your belongings on you.
  • Ensure zips on bags are closed. Mini carabiner clips can be useful for securing zips on backpacks. Consider using a money belt which you can hide under clothing.
  • If you’re travelling as a couple, for example, separate money between yourself and your partner. This ensures that if something does happen, you’re less likely to lose all of it.
  • Keep your money for tips separate. If you are carrying a larger amount of cash then this prevents prying eyes from seeing how much you have on you.

When withdrawing money from cash machines, try to do this during the day rather than night and consider using the machines within banks rather than those on the street.