Travel money: What are the best ways to spend while abroad?

Get the most out of your spending with these top tips for foreign exchange and travel cash.


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No one likes to find out they’ve been wasting precious pounds while spending abroad… if only they’d paid attention to that money-saving mantra beforehand.

That’s why we’ve compiled this extensive guide, to help you weigh up the best form of currency for your trip away, and how to get near-perfect rates every time you spend.

Currency exchange

This is the amount of foreign currency you get in return for your money, which will depend on the exchange rate being offered by the convertor. The higher the exchange rate, the more foreign currency you’ll get for your money.

You can lock in the best exchange rate by buying your travel money when the rate is at a high-point and opting to get your travel money from a provider that charges little or no commission.

Credit cards

A travel credit card abroad works just like it does back home in that you have a cash allowance on the card and will be able to purchase goods and services, much like you would with a debit card. Once you reach the limit of your credit card allowance, you’ll have to pay off the debt to continue using it.


  • Great money exchange rates.
  • Your credit card score could improve if you keep up with repayments.
  • It’s more secure than cash – when stolen you can simply contact the issuer to block the card.


  • You may have to pay foreign usage charges.
  • If you withdraw cash with a credit card, you might be charged with interest (up to 3%), which could affect your credit score.

Digital banking options

A fairly new player to the banking game is a challenger or digital-only bank, such as Monzo, Starling, N26 and Revolut. They claim to put your finances at your fingertips 24/7 and are designed to give you better and faster control of your cash.

Monzo and Starling in particular are especially good options for those who like to travel, as you are able to withdraw cash from a foreign ATM for free, as well as pay for other services via a cash machine, without worrying about interest or extra fees.

Compare the best personal finance apps and digital banks here.

Pre-paid cards

Pre-paid cards are topped-up with money in advance of travel and are used like a regular payment card abroad. These ensure you won’t be fined for foreign money exchange fees as you would with other credit cards.

It’s worth remembering that pre-paid cards lock the currency exchange rate on the day you load your card, not when you use it in a transaction.

This means you should keep an eye on the current rate and buy your pre-paid cards when the money exchange rate is high. You’ll find some currency exchange offices don’t accept these, so do your research and make sure your holiday destination permits their use.


  • Pre-paid cards are one of the cheapest options available for spending abroad.
  • They can also make it easier to track your spending and keep to a budget.


  • There could be an application fee when you first apply for the card.
  • You could be charged a fee every time you top up the card – typically around 3% of the amount you’re loading onto it.
  • You might be charged if you don’t use the card for a number of months.
  • Some cards still charge a fee when you carry out a transaction overseas.

Travellers’ cheques

Travellers’ cheques are on the decline as fewer stores and services accept this form of payment. But, you’ll still be able to buy these from select currency exchange offices and post offices if you wish to.

Once you order your cheques, you’ll need to sign these and assign a set amount to each. Traveller’s cheques work like regular cheques, by filling in the details of the person or institution you’re paying to and countersigning.


  • Travellers’ cheques are one of the safest ways to travel with money.
  • The value can be refunded if they are lost or left unused.


  • It’s likely you’ll be charged commission for these and the exchange rate is applied when you convert them into local currency.
  • Very few stores and services accept these as a form of payment.
  • There will be a flat fee for converting your cheques into currency.

When should you buy your holiday money?

The earlier you sort out your travel money, the more time you have to compare the best exchange rates and benefit from the best deals through currency comparison.

Give yourself a few weeks before you travel to make sure you won’t be stuck with a bad money exchange rate, as would be the case if you purchased your holiday money last-minute at the airport.

How much travel money can you buy?

Currency exchange offices provide their own specific restrictions. This may also be different depending on how you’re buying the travel money e.g. online or in person at the post office. Usually, when ordering money online the maximum travel money you can purchase is up to £7,500.

But you will be unable to travel with more than €10,000 (currently £8,762.40) in cash unless you declare this to customs.

Things to consider

It’s possible that your existing bank account may have a good deal when it comes to using it abroad as a debit card, so if this is the case, use it to your advantage and find out what you’re already eligible for.

If you want to avoid paying any fees, it’s best to load your pre-paid card with a debit rather than using a credit card. Always pay in the local currency when offered the choice, whether you’re at a restaurant or drinking in a bar.

The verdict

As we’ve seen, there are positives and negatives for whatever form of foreign currency you choose to use.

Our advice is to use a combination of cash, which should be exchanged well before you fly, and a debit card ordered from a challenger bank such as Monzo or Starling.

These cards allow you to withdraw money overseas with no transaction fees, as well as pay for food and drink in restaurants via a card machine at no extra cost.

Having a handful of cash on your person is also useful in case of emergencies, or if you struggle to locate a local ATM when you land.

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