The best way to take travel money on holiday

Learn more about the best cards to use, if you should use a UK debit card and other ways to take spending money abroad.

It may not be the most interesting part of planning your holiday, but taking time to think about how to take and spend money before you set off could be the difference between enjoying the trip of a lifetime and enduring the (expensive) holiday from hell.

Imagine if you took all of your holiday spending money with you in cash. You don’t want to be left high and dry if you get pickpocketed the moment you step out of the arrivals terminal at your holiday destination. Keeping your money safe and finding the cheapest way to spend it during your stay will mean you can get the most out of your trip while avoiding as many extra fees as possible.

Which credit cards charge you little (or nothing) to spend abroad? Are prepaid travel money cards a good deal? Should you buy travel currency before you go?

Taking cash with you to spend on holiday

In some parts of the world, the large number of shops, restaurants and hotels that accept Visa, Mastercard and American Express means that you’ll be well served when paying for travel, food, accommodation and entertainment with plastic.

However, in more remote or less developed areas, cash is still king. Indeed, in UK tourist hotspots like Vietnam, Cambodia and Thailand, cash can still speak loudest, so bringing along some of your spending money in cash is certainly a good idea.

Some holidaymakers may prefer using cash for day-to-day expenses as an old-school way to keep track of a spending budget. It’s simple really, if you run out of your budgeted cash for that day, you won’t be tempted to spend any more.

As a general rule, it’s wise to have some of the local currency in cash with you, either to cover sudden unforeseen costs or in situations where a card isn’t accepted and it’s difficult to withdraw money from an ATM. Just be sure to do everything you can to keep your cash in a safe place to prevent loss or theft while you’re out and about.

Should you get your travel money before you go?

You may be thinking about buying travel money from exchanges or bureaux de change before you head abroad, but there are a few factors to consider before doing this.

While brands like the Post Office and ICE are well known, they won’t always offer you the best deal. These companies make their money by charging a fee (commission) on the amount of foreign currency you wish to buy.

Sadly, some firms aren’t very transparent in the way they apply these charges. If a bureau de change advertises its services as “no-commission” or “commission-free”, it usually means it has priced its commission costs into the exchange rate it’ll offer you to exchange your pounds for foreign currency.

If you have a credit card that doesn’t levy extra charges for spending in a foreign currency, it may be cheaper for you to withdraw local currency from an ATM once you arrive at your destination.

If you decide to buy travel money in cash before you go, be sure to shop around and check a wide range of travel money providers.

Pros and cons of taking cash on holiday


  • Widely accepted. Cash is widely accepted across the globe. In fact, it’ll usually be tricky to find a business that won’t take cash for products or services.
  • No fees. You won’t need to be worried about being charged any fees you may otherwise incur if you pay with a debit or credit card


  • Easily stolen. If somebody runs away with your cash, you’ll likely never see it again. At least with a credit or debit card, you’re likely to be able to contact your bank to prevent any unauthorised spending if the card is stolen.
  • You’ll miss out if the pound strengthens during your trip. If you take cash with you to your destination, you may lose out if the British pound strengthens after you’ve bought the foreign currency. Withdrawing cash from a suitable travel credit card may offer you a more current, better value exchange rate.

Using credit cards abroad

Using credit cards may be the safest and most convenient way to spend money while you’re away. This is largely because the security functions for most credit cards are top notch. If your card is lost or stolen while you’re away from home, your card provider can quickly cancel that card and send a replacement.

Additionally, some credit cards can be “frozen” from within your bank or card company’s phone app, making it much more difficult for a thief to make use of it. Credit cards can also beat prepaid travel money cards as you don’t need to decide how much you’re going to spend in advance.

Aside from the safety issue, credit cards can be a particularly smart option for travel, as many do not levy any additional charges for spending abroad. These travel-friendly credit cards can also offer a range of perks, such as travel insurance included as standard or offered as part of a monthly paid-for bundle.

However, be aware that most credit cards charge interest on cash withdrawals. If your credit card is not particularly travel-friendly, you may also incur non-sterling transaction fees as well as any interest. So make sure you check your card’s conditions before heading abroad to ensure you won’t incur any extra fees.

If you want to find out more about how travel credit cards work and to find the right one for you, head over to our dedicated travel credit cards guide.

Dynamic currency conversion – Avoid it like the plague!

If you’re eating out at a restaurant, you may be offered the choice to pay with your credit or debit card in either pounds or the local currency. As a rule, you should never choose to pay in pounds.

This practice, known as dynamic currency conversion, usually represents very poor value as the exchange rate used to convert your restaurant bill into pounds is very poor. This means that you’re virtually guaranteed to end up paying more for your meal if you choose the option to pay in pounds, as opposed to the currency of the country you’re visiting.

Pros and cons of using credit cards abroad


  • Global acceptance. Visa and Mastercard are widely accepted across the globe, especially in developed and middle-income countries. American Express and Diners Club cards are also accepted worldwide, though in fewer places than Visa or Mastercard.
  • Can be cheaper than bureaux de change. Spending abroad using a suitable debit card can save you money when compared to rates offered by bureaux de change and banks. The best credit cards offer near-perfect exchange rates when used for spending.
  • Safer than cash. Cash can get stolen easily. If your debit card is stolen, you can usually report this to your card issuer and it will cancel the card, ensuring you’re not out of pocket.
  • Avoid fees (with the right card). Using the right travel credit card will mean that you won’t incur any extra fees for spending abroad.
  • Other perks. Credit cards designed for overseas use can come with travel-related benefits such as a 0% purchases deal to help spread the cost of your holiday, frequent flyer rewards programs, complimentary insurance or airline lounge passes.
  • Your card provider is on the hook too. If anything goes wrong with travel or accommodation paid for with a credit card, your chances of getting a refund are higher than with any other form of payment, as your credit card company or bank is jointly liable for the payment.


  • Non-travel-friendly credit cards can cost you. Not all credit cards offer fee-free spending abroad, so make sure you check your card’s terms and conditions to avoid getting stung with extra charges.
  • Interest charged on withdrawals. Many credit cards will charge you interest for making cash withdrawals abroad, even if you repay the balance.
  • Temptation to spend. While a line of credit can provide you with peace of mind, it might also tempt you to spend money that you don’t really have. Remember that you’ll have to pay back everything you charge (plus interest if you don’t pay your balance in full each month).

Using debit cards abroad

Finding the right bank account can mean the difference between getting the most out of your holiday money or frittering it away in extra fees or charges for withdrawing cash.

One of the best low-cost ways to spend abroad is to use an app-only bank, such as Monese, Monzo, Starling or Revolut. This is because, aside from the “palm-of-your-hand” convenience they offer to customers, these digital banks usually offer fee-free transactions and withdrawals abroad.

The debit cards linked to these accounts are great for overseas spending as they use the Mastercard exchange rate, which is usually as close as it gets to perfect market exchange rates as it’s possible to get. These providers also tend to offer a very generous monthly fee-free overseas cash withdrawal limit.

Debit cards linked to accounts with other, more traditional, high-street banks can also offer decent fee-free overseas spending and cash withdrawal options. Always check your account’s terms and conditions before heading off on holiday to make sure that you won’t get charged extra for international spending.

As with credit cards, it is usually possible to “freeze” your debit card via your bank’s linked phone app if your debit card is lost or stolen.

Pros and cons of using debit cards abroad


  • Can be cheaper than bureaux de change. Spending abroad using a suitable debit card can save you money when compared to rates offered by bureaux de change and banks. The best debit cards offer near-perfect exchange rates when used for spending.
  • Widely accepted. Debit cards are widely accepted, especially in developed and middle-income countries.
  • Safer than cash. Cash can get stolen easily. If your debit card is stolen, you can usually report this to your card issuer and they will cancel the card, ensuring you’re not out of pocket.
  • Can help you avoid fees. Using the right debit card will mean that you won’t incur any extra fees for spending abroad.
  • Generous ATM withdrawal limits. Many travel-friendly current accounts offer a decent fee-free cash withdrawal limit when abroad.


  • Non-travel-friendly debit cards can cost you. Make sure you check your current account’s terms and conditions, as some accounts from traditional high-street banks will charge you extra for spending and taking cash out overseas.

Using prepaid travel money cards

Do you want the functionality of a good travel-ready credit card while keeping a close eye on your spending? Prepaid travel money cards may be the choice for you. These products, from brands like Wise, FairFX and Caxton can be a nifty way to spend your money abroad.

As the name suggests, prepaid cards differ from traditional debit or credit cards as you load money onto them either by logging in to an account online or via a smartphone app linked to the card. The best travel money cards will offer very competitive currency rates, meaning that you can be relatively confident that you’re getting as much foreign currency as possible for your pounds.

However, while they may offer competitive exchange rates, travel money card providers levy fees for using and managing these cards (this is how they make money). So always check the fees before you sign up.

If you want to find out more about how prepaid travel money cards work and to find the right one for you, head over to our dedicated prepaid travel money cards guide.

Pros and cons of using prepaid travel money cards


  • Can be cheaper than bureaux de change. Spending abroad using a travel money card can save you money when compared to rates offered by bureaux de change and banks.
  • Safer than cash. Cash can get stolen easily. If your travel money card is stolen, you can report this to your card issuer and they will cancel the card, ensuring you’re not out of pocket.
  • Protects against exchange rate fluctuations. If you’re able to load money onto the prepaid card in the currency of your choice, you can lock in the exchange rate, meaning you’ll be protected if the pound weakens while you’re abroad.


  • You’ll miss out if the pound strengthens during your trip. Prepaid cards allow you to lock in exchange rates if loading money onto the card in a foreign currency. However, this may be a disadvantage if the pound strengthens while you’re abroad, as you won’t be able to benefit from the increased buying power of your pounds.
  • Check for fees. Travel money cards usually charge higher fees for certain transactions when compared to travel-friendly debit or credit cards.
  • Some credit and debit cards already offer strong exchange rates. Your existing debit or credit card may already offer a decent exchange rate when compared to other means of obtaining foreign currency or spending while abroad.

The bottom line: Consider which travel money option is best for your destination

There is no one correct way to spend money while you’re away on holiday. It’s all about what works best for your circumstances and your destination. However, there are some general tips that can serve you well while you’re abroad to reduce the risks of losing your money and ensure you can enjoy your holiday by only spending on the things you really want while you’re there.

Taking a small amount of cash with you for emergencies while you’re out and about is always a good idea. Think of those small items like taxi fares, restaurant tips and small souvenirs. Pairing your cash with a travel-friendly debit card linked to a good digital bank account can be a cost-effective way to spend as safely as possible.

If your existing accounts charge you fees for spending or withdrawing cash abroad, it’s best to investigate other options for obtaining your travel money. This is where products like travel credit cards and prepaid travel money cards can be useful.

Depending on where you’re going, and which app, or card you use, you’re sure to find a great cost-effective way to spend your hard-earned money abroad.

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