Best ways to spend travel money in Israel: Debit and prepaid cards

If you’re travelling to Israel, you’ll be able to make purchases using a debit or credit card in many places. ATMs that accept international cards are also widely available in tourist areas. You may need to use cash for purchases at smaller shops or markets.

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UK debit cards

Taking a debit card with you will enable you to pay for items quickly and easily in shops and restaurants, as well as withdraw cash. Mastercard and Visa debit cards are widely accepted in Israel.

However, you’ll need to watch out for fees. Some debit cards will charge a foreign transaction fee of around 2.75–2.99% every time you pay for an item. If you withdraw cash, you might also be charged a cash withdrawal fee of 2–2.75%. That means that if you withdraw £100 from an ATM in Israel, you could be charged a total of £5.74 (£2.99 + £2.75).

For this reason, if you want to take a debit card with you, it’s a good idea to look for one that won’t charge foreign usage fees.

Prepaid travel cards

Prepaid travel cards can be used for purchases and cash withdrawals while you’re in Israel. Depending on the card you choose, you may be able to load it with foreign currency before you head off on holiday, enabling you to lock in a set exchange rate. Or you can load it with pounds and each time you spend, your pounds will be converted to shekels at the exchange rate on that day.

Prepaid travel card providers use either the interbank exchange rate or the rate set by Mastercard or Visa, or one of these with a fee on top. Depending on the card you choose, you may not have to pay a cash withdrawal fee abroad.

Prepaid cards can be useful for budgeting as you can only spend what’s on the card. If you need more money, you simply top up your card again.

Credit cards

Visa and Mastercard credit cards are accepted in most places in Israel and the advantage is that you’ll benefit from Section 75 protection on purchases that cost more than £100 and up to £30,000.

The downside is that if you don’t pay off your bill in full at the end of the month, you will usually pay interest. Depending on the card, you might also have to pay a foreign transaction fee of around 2.75–2.99% and if you withdraw cash, another fee will apply on top. Try to look for a credit card that won’t charge these fees if you want to use one for your trip to Israel.

That said, keep in mind that cash withdrawals on credit cards are generally best avoided even if your card doesn’t charge any foreign usage fees. This is because you’ll be charged interest from the date of the transaction, even if you pay off your balance in full that month, making it a very expensive option.

Traveller’s cheques

Traveller’s cheques are no longer as popular as they once were, but you can still take them to Israel – though they are not widely accepted. It is best to take them in US dollars and exchange them at post offices as this will be commission-free. Otherwise high fees will apply.

How much money do I need to take to Israel?

Budget	Midrange	Expensive
	Hostel £15-£35 per night	2 Star hotel £60 – £100 per night	5 star hotel £130 – £300+ per night
	Street food £2-£7 per dish	Dinner for two at a traditional Israeli restaurant £20 – £30	Up-scale restaurant £55+ per person
	Sightseeing for free! Float in the dead sea	Shopping in the local markets	Camel riding £20+

_{*Prices are for example purposes only.}

Bottom line

Taking some cash with you on your travels to Israel can be handy. But it’s also sensible to take some form of plastic so that you’re not carrying around too much cash that could easily be lost or stolen. Whether you choose a debit or credit card or a prepaid card, make sure you look for one that doesn’t charge high foreign exchange or cash withdrawal charges.

Frequently asked questions

• What does dynamic currency conversion mean?

  This is when a retailer converts your purchase into pounds sterling rather than keeping it in the local currency. When this happens, the exchange rate is usually much worse, which means you’ll end up paying more than you need to. So if you’re given the option of paying in the local currency or pounds sterling, always choose the local currency.

• What is the Israeli currency?

  The local currency used in Israel is the new Israeli shekel. Each shekel is divided into 100 agorot. Banknotes are in denominations of 20, 50, 100 and 200 shekels and coins are in denominations of 1, 2, 5 and 10 shekels and 5, 10 and 50 agorot.

Written by

Rachel Wait

Writer

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio