Q: I’m going on holiday for 2 weeks. My friends are all taking cash with them but I’m reluctant to do this in case I lose it – what are my other options?
Answer: The world of travel money is notoriously difficult to negotiate. Do you take money with or change there? Do you take cash, card or cheque?
Luckily as travel becomes more commonplace so the options seem to expand. These days many card providers have cut their fees, credit cards especially for travel are available, and you can even get your hands on preloaded cards, so what’s the best option?
What to look out for
Whilst cash is certainly an option there is always the risk of it being stolen. If you do opt for cash make sure you get your money before you travel as exchange rates are likely to be preferable. It’s also a good idea to exchange before you get to the airport, and to exchange cash rather than by card to avoid fees.
If you’re looking for a specialised travel card on the other hand there are a few things to be aware of. First off is the infamous loading fee, or exchange rate fee levied by many cards whenever you make a withdrawal overseas.
The best travel cards won’t include a foreign loading fee at all, making them that much more attractive. However, you also have to be aware of withdrawal fees. Some cards charge you for the exchange rate and charge you for overseas withdrawals, which are the worst of both worlds.
You should particularly be aware of withdrawal fees with a credit card. Most credit cards have an automatic withdrawal fee but specialised travel cards may not.
Debit and Prepaid cards
Don’t think that debit cards are better though. Some debit cards which offer free withdrawals in the UK charge for both withdrawals and charge a loading fee for using them overseas.
Although some debit cards do exist which are suitable for use overseas they are few and far between so you may have to switch bank to get your hands on them.
With prepaid cards be aware that they may not be accepted everywhere and, if you don’t use the money loaded on them, you may lose what you put on if you leave things too long.
On the plus side there are many good deals available. Again, watch out for loading and withdrawal fees.
• No foreign transaction fee credit cards – Find the best credit cards for spending overseas
• Travel money tips – Read more travel money tips for spending on your holidays
• Prepaid cards – Learn all about prepaid cards