Travel money options for your holiday

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It is now easier than ever before to access funds while you are travelling abroad. However, high commissions and fees, and poor exchange rates can quickly eat into your holiday funds. We look at the most economical ways to manage your travel money.

There are many ways to access your finances while you are traveling abroad and each has its own advantages and disadvantages.

Traditionally, travelers usually brought a combination of cash and travelers cheques, and maybe a credit card. However, the travel money landscape has shifted significantly in recent years with many more options now available.


It is always a good idea to buy some of the currency from the country or countries you are travelling to before you leave so you have some spending money when you arrive. All the main high street banks offer foreign exchange services. You should not pay more than 1% commission for this and there is usually a minimum charge of £1.50 to £5. If you are travelling off the beaten path you may have to order some currencies in advance, while certain currencies, such as the Indian Rupee, are not available to buy in Britain.

Travellers cheques

Travellers cheques provide much more security than cash but can work out to be an expensive option. In addition, they are a little inconvenient as you will have to find a bank that is open to cash them.

Rates for buying and selling travellers cheques can vary significantly so be sure to shop around. Total costs can be as high as 6% so it is well worthwhile to look at all the options. The chief advantage of using travellers cheques is that they are secure. You should take note of the serial numbers of the cheques and keep them in a separate place to the cheques themselves. If they are lost or stolen, you can easily have them cancelled and replaced.

Debit cards

Debit cards allow you to withdraw cash directly from your own bank account in Britain while you are on the road. Most countries now have well developed ATM networks so you will have access to money 24 hours a day. However, charges can be high. For example, Barclays charges a 2.75% exchange commission and a 2% transaction charge (min £1.50, max £4.50) for ATM withdrawals outside the UK.

Credit cards

Credit cards have practically become essential for the modern traveller and can be the cheapest way to obtain foreign currency. In addition, you will need one for certain services, such as car rental.

One of the main advantages of bringing a credit card is that you can avoid many of the fees and charges associated with other methods. Purchases with your card do not attract fees, although ATM withdrawal fees may be chargeable if you withdraw money with your credit card while you are abroad. However, make sure your account remains in the black at all times or you will attract high commissions and interest charges.

We recommend that you have a number of travel money options while you are abroad. Be sure to have more than one card, in case one gets lost or stolen, and a couple of emergency travellers cheques.

It may also be a good idea to have a contingency plan in case of emergency. Leave some money with a family member or friend that they can wire to you through a company such as Western Union. Transfer fees are high but this could get you out of a scrape.

Finally, do not leave home without good travel insurance. This should protect you against any significant loss of money from theft or fraud.

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