Should you use cash or card on holiday explained
Airlines and holiday companies are announcing bookings for trips abroad are selling out, as sun-starved Brits head for the sun and adventures for the first time since the pandemic.
You’ll also find when you go to buy foreign currency that things have changed in this sector too. A lot of Bureau de Change’s went bust over the pandemic for obvious reasons.
That means there’s a whole new breed of currency businesses – and new ways to pay for things abroad. Here’s what you need to know.
Finding the best exchange rate before you travel is vital. There have been a lot of currency fluctuations lately, so keep an eye on the rates.
MoneySavingExpert has a great comparison tool that helps find the best rates.
Have you been ripped off by a holiday company? Let us know: [email protected]
You can usually opt to get your money in person or have it delivered. In the interests of research for this article I went down to meet the Currency Online Group, who had best rate from the MSE tool in Waterloo.
I was rather surprised to find that the company wasn’t based a shop, instead it was in an office space.
The advantages of this are you sit in a private room while your money is counted, so you aren’t a target for opportunistic thieves on your way home!
When I researched exchange rates and fees, these new services came out on top over banks or more established names. Factor in delivery charges though.
Using a credit card
Surprisingly, there are some credit cards that give you the most competitive exchange rates on the day you spend. However, not all credit cards are equal so don’t assume that the one you currently have will deliver.
Specialist travel credit cards exist specifically for the holidaymaker and don’t generally charge fees (though withdrawing cash can be costly with some).
You can compare the best cards online but be aware that the application process, acceptance and delivery might take a few weeks.
Other credit cards may have good rates but check what the fees are for using them abroad before you travel.
Credit card purchases are also covered by section 75 of the Consumer Credit Act if you spend over £100 on goods or services, which can be useful if you’re paying for flights or accommodation and it gets cancelled or there’s a problem.
This is because you can claim back the money from your card provider if there’s a dispute. But pay the card off immediately or you’ll be hit with high interest.
Using a debit card
Paying by debit card – and withdrawing cash in particular – can be a pricy business abroad. Most of the main bank cards bill you all kinds of fees per transaction and the exchange rates are often poor.
Step forward then, the new digital banks! These online services often offer very travel friendly cards with a bank account.
The best ones don’t charge fees at all and the exchange rates can be reasonable too. You can apply online for the accounts easily and if you just want to use them abroad, all you need to do is transfer over some cash.
This is a good idea if you want to take a mix of travel money but have a card available too for spending so you’re not carry a load of currency around with you.
Pre-paid travel cards
You can also get your currency on a pre-paid card too. These cards can be useful if you want to ensure that you’ve got a specific exchange rate.
However, check first to see how widely accepted they are. There’s nothing worse than having travel money but not being able to spend it.
Six things to remember
As always, there are things to watch out when traveling when it comes to money. Here are my top tips.
- Never buy cash at the airport as the rates are pretty much always terrible. That includes on the way out and on the arrival too.
- Split your cash between wallets, purses and secured spaces when not using it – including your plastic cards. If something goes wrong you don’t want to lose all access to money.
- Don’t withdraw cash on your credit card. This can go on to your credit file and to a prospective lender, it can look like your finances are so poor you needed to draw on expensive credit to get by.
- Save the emergency contact numbers for your bank, credit card and travel insurance providers on your phone.
- Don’t leave cash or your valuables in your suitcase unattended – and that includes at the hotel while waiting to check in or after you’ve checked out. I’ve seen insurance claims rejected on this basis.
- As a general rule, when paying by card pick the local currency to avoid poor exchange rates – though do bear in mind any service charges that might appear on the machine too.
Just taking the time to do a bit of research on the best spending options for you can save you a fortune abroad. So prep in advance and you’ll be able to make the most of your money on holiday.
- Get help with all things travel related and save some cash too at Resolver
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