How to get the best travel cash and cards
There's a number of ways you can end up losing out when you buy your foreign currency or make financial transactions abroad. But use our easy-to-follow guidelines and you will get the most out of your holiday money.
Quick links to the best:
>> Free currency exchange card >> Foreign currency bureaux
>> Debit
>> Credit cards to use abroad
>> Traveller's cheques
Cash or cards?
If you hold a current account or credit card with one of the major providers, the likelihood is that you are getting charged over the odds on all withdrawals and transactions you make abroad.
So if you travel frequently, you should consider setting up an alternative current account, and perhaps obtaining a particular credit card, to use when abroad: see below.
In the meantime you'd probably be better off buying currency in advance and, although most people don't like to carry a large amount of cash, most do like to arm themselves with some currency before arrival...
Best places to buy foreign currency
First, under no circumstances wait until the airport: you will get a poor deal. Second, commission is no longer an issue, competition is now waged on the exchange rate.
Traditionally, the best rates on the High St have been found at Chequepoint, Thomas Cook, Marks & Spencer and the Post Office.
But rates - and who offers the best deal - vary from day to day unfortunately, so it is difficult to recommend one High St bureaux over another. Each of the four providers mentioned above quote their rates online every day, so they can be easily compared.
But the best rates are offered online.
On eof the best options is Travelex - especially if you don't have time to wait for delivery. Travelex online offers very competitive rates (unlike their airport bureaux) and you can pick up your currency at the airport bureau of your choice if you order by midnight the night before.
Even if you have time to order from other online providers who deliver to your home, Travelex is often the best deal as there is no delivery charge.
Typically, the other online providers will charge a fixed fee of £3 to £8 for orders below a minimum amount, which can be anything from £100 to £1,000.
At the time of writing the best deal, inclusive of delivery charges, on £200 of euros was Travelex. Then came Travelcare, Thomas Exchange Global, Interchange FX, Currency Express and OnlineFX. For larger amounts which qualify for free delivery these online brokers will tend to overtake Travelex as their exchange rates are better.
Best debit
Most major banks make significant charges on cash withdrawals overseas. Halifax, Lloyds TSB, Natwest and RBS are all particularly bad offenders. Typically, for debit-card cash withdrawals, you will pay a fee of around 2.5% (with a minimum of £2.50), and the bank will also 'load' the exchange rate so that you're effectively paying a commission of 2.75%.
The runaway best option has always been Nationwide's FlexAccount Visa debit card, because users until recently bore none of these charges. Despite the fact that Nationwide has recently introduced a 1% fee on overseas use of the debit card, it is still the best option for cash withdrawals.
This is because it does not load the exchange rate.
Whether the rate it gives is better than the best forex bureaux at home is a moot point: with the introduction of online currency providers with competitive rates, it could well not be.
You can open the FlexAccount with Nationwide – but you don't have make this your main current account. You can open one, leave it idle, and feed money into it before going away.
As for using debit cards to make purchases or pay for meals abroad: this is sometimes worse value than making a large cash withdrawal. If you want to pay by card, you are better off with a credit card, as long as it's the right one.
Best credit cards to use abroad
The answer depends on whether you will pay off the balance in full when you return. If so, Post Office and Abbey Zero are the best bets as they are the only ones that do not charge a fee on overseas use.
If not, it is better to go for the lowest-rate card for general spending: >> credit card best buys.
It is generally inadvisable to use credit cards to withdraw cash, whether at home or abroad, except in urgent circumstances.
With any card transaction, resist the offer of so-called 'dynamic currency conversion'. Vendors or cash machines increasingly ask 'do you wish to be charged in sterling (GBP)?' Always say 'no'.
Traveller's cheques
Traveller's cheques have been largely superseded by cash and cards. They could come in useful in two cases however:
• If you do not want to use cards but also do not feel secure carrying cash.
• For the United States. American Express US dollar traveller's cheques are accepted by many retailers, hotels and restaurants in the US as a form of cash. You will receive change in cash, and be charged no commission.
The best places to buy your TCs are as for currency above.
Get the best deal for your holiday cash
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