Travel money options – cash, cards and traveller’s cheques

If you’re going abroad, find out if cash, cards or traveller’s cheques – or a combination of all three – are the best options for your travel money.

• Taking foreign currency with you
• Using cards abroad
• Debit cards abroad
• Using credit cards abroad
• Using pre-paid cards abroad
• Using traveller’s cheques
• How to make the most out of your travel money

Taking foreign currency with you

No matter how you want to pay for things while you’re abroad, it’s always a good idea to take some travel money in the local currency to pay for essentials like food and drink, tips and taxis.

However, it is not advisable to carry large amounts of cash, so you might want to consider other ways of paying for things on holiday.

Rules on how much money you can take in and out of a country vary across the globe.

You should check before you travel as you might need to declare it at customs.

If travelling between the UK and a non-EU country, you must declare cash and traveller’s cheques of €10,000 or more.

You could face a fine if you don’t declare it.

Where to buy

You can buy holiday money from:

• Banks
• Travel agents
• The Post Office
• Bureaux de change
• Foreign exchange brokers
• Specialist online providers
• Some shops and supermarkets

Top tips

Here are a few tips for buying your currency before you set off.

• Sort out your money before you go – you’ll get a better exchange rate and more currency for your money than if you buy it at the airport.
• Shop around for the best exchange rate – with so many companies offering foreign currency you could get more for your money by choosing the one with the best exchange rate. Use a currency exchange comparison site to find the best deal.
• Check the charges – you might need to pay a charge of around £5 to pick up your currency, or even have it delivered to you. If you’re buying above a certain amount, then the fee could be waived but it’s worth checking in advance to see how much you’ll pay.

How safe is using cash?

Carrying cash when you’re abroad is never as safe as using cards or traveller’s cheques.

Travel insurance will usually only cover you up to a certain amount of cash if it’s lost or stolen.

This is typically between £200 and £500, so if you’re carrying much more you run the risk of losing your money altogether.

Check your travel insurance policy so you know what you’ll be covered for.

A good way to make sure you’re covered just in case is to take a small amount of cash as well as a card and possibly some traveller’s cheques.

So, if you lose your cash, you’ll still have some money left to spend. It’s worth checking if there is an ATM and whether traveller’s cheques are accepted where you’re going.

Using cards abroad

Many people prefer to use cards while they’re away because they’re convenient and they’re accepted around the world.

If you choose the right cards, this can be the cheapest way to pay for things while you’re away and (with certain cards) to get cash from ATMs.

To help avoid fraud or card cloning, we suggest you should not let your card out of your sight.

The waiter or shop assistant should always process transactions in front of you. You’ll also be protected if you buy faulty goods or if something you ordered isn’t delivered.

The rest of this section looks at how the different card types work and the pros and cons of using them abroad.

Debit cards abroad

These are great for withdrawing cash from an ATM and work in much the same way as they do when you use them at home.

Pros and cons

• Quick and convenient way to withdrawn local currency from cash machines.
• You’ll be charged to withdraw money – this usually adds around 2% on the amount you take out and some cards will also add a fee of around £1.50 on top, as well as charging currency exchange costs.
• ATMs are not readily available in some countries.

How safe are debit cards?

You’ll be protected against fraud, so if someone steals your card you can claim compensation for any money they spend.

But, unlike with a credit card, you won’t be covered for any faulty or undelivered goods you buy while you’re away.

Using credit cards abroad

These are the most widely accepted cards around the world and with the right card, can be the cheapest way to go.

Pros and cons

• Most countries in the world accept them.
• Some specialist credit card providers won’t charge you to use them abroad – check out our guide Cheap cards to use abroad.
• Purchases are protected in the same way as in the UK. This includes if you buy faulty goods or have your card stolen.
• Some cards will add a fee of up to 3% on anything you buy.
• If you use them to get cash you’ll usually be charged interest straight away, even if you pay off your card in full.
• If you don’t pay off your card in full at the end of the month, you’ll pay interest on what you bought on holiday.
• You might also need to take some cash for smaller purchases in case the retailer has a minimum card payment amount.

Using pre-paid cards abroad

These are a great alternative to traveller’s cheques – you simply load the card up with money before you go and you’ll be able to spend it to your heart’s content while you’re away.

Pros and cons

• You won’t be able to spend more money than you have on the card.
• If you are travelling across several countries with different currencies, you can pre-load the card with each currency.
• If there is any cash left on the card after your holiday, most cards can also be used in the UK.
• You’ll be charged a fee if you need to top-up or withdraw money from an ATM.
• Some cards carry additional charges like a monthly fee, or an extra charge if you don’t use the card within a certain period.
• If you lose your card, a replacement can cost around £5 to £10.

How safe are pre-paid cards?

These cards are growing in popularity as a safe alternative to traveller’s cheques as the money you load onto the card will be protected if it’s lost or stolen.

Plus, the card isn’t linked to your bank account so you can only ever lose what you’ve put on the card.

Using traveller’s cheques

These are pre-printed cheques for fixed amounts which you can use to pay for things or exchange them for cash while you’re away.

Where to buy

They are available in major currencies such as sterling, euros and US dollars and can be bought from:

• Banks
• The Post office
• Bureaux de change
• Some travel agents
• Specialist online providers

How they work

When you buy your traveller’s cheques, you’ll need to sign each one as soon as you get them.

When you want to spend them, they work much like banking cheques at home – you’ll need to write the name of the person you’re paying and then countersign the cheque.

This proves you’re the person who bought the cheques – you might also need to show ID so it’s a good idea to keep your passport with you just in case.

You can use them to buy things costing less than the value of the cheque and you’ll get change in local currency.

Pros and cons

• They’re a great way to budget your money and keep a close eye on what you spend.
• You won’t need to carry large amounts of cash with you.
• If you want to exchange them for cash you’ll need to find someone who accepts them so there’s a little more legwork needed than if you’re carrying cash.
• You typically have to pay a fee when you buy the cheques and commission when you use them. Generally, they cost more than using cash or cards.

How safe are traveller’s cheques?

These are much safer than cash because if you lose them, they can be replaced, wherever you are, usually within 24 hours.

Here are a few tips to make sure you stay safe when using traveller’s cheques.

• Always keep your receipt
• Don’t countersign them (sign them for a second time) until you need to use them.
• Write down the serial number of each cheque and keep it in a different place together with the contact number for the company you got them from. Most traveller’s cheques include a separate page or slip for this.

How to make the most out of your travel money

If you’re going abroad, here are a few tips to help you get more from your money while you’re away.

• Take a mix of payment types – you’ll find it useful to have some local currency including some small notes, as well as cards just in case you need them.
• Buy your currency before you go – it’s usually cheaper and you can compare the best rates, particularly if you use currency exchange comparison websites. Look at fees as well as rates when you compare. Use the link below to find out more.
• Remember your card company’s 24-hour number – make a note of this before you go so you can get in touch if something goes wrong.
• Avoid credit card fees – make sure you choose a specialist credit card that won’t charge you for using it while you’re away.
• Let your bank know where you’re going – if you don’t tell them you’re going away they might think your card is being used fraudulently and block your account. It’s a good idea to give them a contact number too, just in case they need to get in contact with you.
• Pay off your credit cards – if you spend money while you’re away, make sure to pay off your card in full each month so you don’t pay interest.

This article is provided by the Money Advice Service.