Travel money: The basics

Spending abroad is easy when you know which currency you'll need and how to exchange your money for the best rate.

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Amelia Glean

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It may seem a little overwhelming at first, but setting a budget for how much you’ll spend while abroad and comparing providers for the most cost-effective ways of doing so are simpler than you might think.

This guide gives you the basics to understanding foreign currency and everything you might need to consider before you purchase.

What is travel money?

This is the currency you use to pay for things abroad, instead of pound sterling.

Which currency do you need?

It depends on which country you’re visiting. Most have their own currency but some share with other nations.

For example, these 20 countries all use the euro: Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia and Spain.

Some countries also use another currency on a more informal basis, like in Mexico where the US dollar is accepted alongside the Mexican peso.

What is an exchange rate?

This tells you how much foreign currency you can get in exchange for your existing currency.

Say the pound sterling to euro exchange rate was 1.37, you would get 1.37 euros for every pound you exchanged.

Exchange rates change and differ from one company to another, so make sure you shop around and compare rates to find who will give you the most travel money in total.

Some travel money companies will give you a better rate if you buy a large amount. Consider this, because even if it is only a slightly better rate, it could save you money if you’re exchanging a big lump sum for yourself or a group.

How can you tell if it is a good exchange rate?

The higher the exchange rate, the better. 1.37 is a better exchange rate than 1.25, for example.

What happens if the exchange rate changes after you buy your travel money?

Nothing at all. When you buy your travel money you get the exchange rate available at the time of purchase, it does not matter if it changes later.

Can you exchange one foreign currency for another?

No, you can only sell foreign currency in exchange for pound sterling in the UK.

How much travel money will you need?

This depends on how much things cost, where you’re going, what you plan to do and how long you plan to visit.

Our advice is to set a budget on how much you want to spend and make sure to set aside a little extra in case of emergencies.

Work out how much you can afford to spend on the following:

  • Eating out, e.g. snacks, breakfast, lunch, dinner etc.
  • Drinks, e.g. water, juice, pop, alcohol etc.
  • Shopping, e.g. souvenirs, clothing, toiletries.
  • Transport, e.g. taxis, buses.

You may don’t need to budget for everything. If, for example, you’re going on an all-inclusive holiday you may need less money to pay for your food while you’re away.

How much travel money can you buy at once?

This depends on the travel money company, as each has their own minimum and maximum amount they will let you order.

Although you may not be planning on taking a large amount of foreign currency on your trip, be careful of any cash restrictions for taking money in and out of the UK, for example:

If you take more than the equivalent of €10,000 from the UK to a non-EU country, you have to declare it to customs or risk your cash being seized.

Where can you buy travel money?

There are a few options when it comes to actually purchasing your foreign currency:

Online

There are lots of travel money companies that let you order currency online with the option of home delivery or collection.

Bureau de change

You can visit travel money companies on the high street or at the airport to convert your pound sterling into a foreign currency in person.

Abroad

You can withdraw money using your debit or credit card at a foreign ATM, but this can be quite expensive due to foreign usage fees unless you bank with the likes of Starling and Monzo, which are digital banks that offer free withdrawal abroad.

Take a travel money card instead

Lots of travel money companies offer prepaid travel money cards online and in-store. You simply top up the card with pounds sterling and withdraw foreign currency from an ATM abroad.

Beware that not all travel money cards are suitable for every type of currency, so make sure to check with the provider before applying.

What if you cannot find the currency you want?

You could use a prepaid card or exchange your money once you arrive at your destination, which will give you access to closed currencies too.

What is a “closed currency”?

This is a currency that’s only available in its country of use. Countries such as Morocco, Tunisia, Cuba and Vietnam all have closed currencies and it’s illegal to leave the country with any of their money.

Never buy at the airport

Buying at the airport is very similar to buying on the high street, but it is usually much more expensive. If you have to get your travel money at the airport, pre-order it online first to get a better exchange rate.

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