The Smart Guide to Travel Money
You can save lots of money on overseas spending just by paying the right way. Don`t pay to pay for your restaurant bills, your car hire or your big plastic inflatable dinosaur for the beach… How you choose to pay in a foreign currency could save you transaction fees, loading charges, ATM fees and mean better exchange rates – making your money go further.
Taking the right travel money and cards will save you money.
Everything you buy could be cheaper! There are many options for travel money including cash from bureau de changes, normal credit and debit cards or getting a prepaid card.
However, the best way to spend money abroad is with a specialist credit card for spending overseas or alternatively a prepaid card.
The best credit cards for spending abroad
Specialist credit cards are the method of cheapest overseas spending. Therefore they are your friend. Most people with a regular income and a decent credit score should be able to get one but remember to always repay the balance in full every month to avoid interest charges. Failing to do this will undo all of the good work you have done.
Halifax Clarity Credit Card
This specialist travel credit card is the best way to spend overseas at the current time.
The Halifax Clarity card is probably the best way to spend overseas.
- A `perfect exchange rate` – you will get the Mastercard rate which is just about perfect.
- No fee for spending in other currencies.
- No fee for cash withdrawals (although you will pay a small amount of interest even if repaid in full as technically you are borrowing the money as this is a credit card) However, this is very low and works out around £1 per month per £100 which will still save you lots.
- No annual fee.
- Interest rate of 12.9% for most (if you repay in full this is basically nothing for overseas spending)
- Basically fantastic if you repay in full
Capital One Classic Extra
The Capital One card is slightly easier to get and also has no fee for overseas spending and a `perfect` exchange rate. It also gives you 0.5% cashback on all UK spending. However, there is a cash withdrawal fee of 3% and there is a higher interest rate than the Halifax Clarity making it slightly worse. It`s a decent alternative and much better than normal credit or debit cards.
TIP Pay in the local currency i.e. euros – you may be offered to pay in £ but the exchange rate is likely to be awful!
Consider Prepaid Cards too
- Widely accepted like credit and debit cards.
- Very competitive and better than normal cards for overseas spending.
- Exchange rate is set when you load up – very simple and easy to understand.
- Easy to use and get and you can set your limits.
- No hassle – just top up and use.
My favourite is the award winning Caxton Fx card. It tends to give a very good exchange rate (although not as good as the Clarity or Capital One credit cards above) and is easy to top up. There are no spending fees and no ATM fees for overseas use.
Your money is covered if the card is stolen (although there is a small fee for a replacement card) and your money is safe as it is regulated by the FCA. You can either get the Euro or Dollar card – the Global Traveller has more fees. I have used my Euro card quite a lot particularly for ATM withdrawals and it is great. It saves you money and there are no hidden fees. Definitely worth considering.
Take some cash too – balance is best
Take a relatively small amount ($200 or so) of cash as well to make sure you are covered for the unexpected or for small tips. You may arrive and not find an ATM, find your card has been declined or that a lot of places don`t accept Mastercard (particularly in less developed countries). Having (some) cash is essential. Or if a place seems dodgy then don`t use your credit or debit card. Fraud or copying your card details is a serious problem and more than a little annoying. Yet, don`t get ripped off.
Compare exchange rates online! Certainly don`t just wait until you get to the airport and pick up foreign currency. You are then a captive customer and they sure know how to take advantage of that. Like anything taking a sensible balance of payment methods is best and helps avoid awkward and disastrous situations where you are stranded with no money.
Photo credit https://www.flickr.com/photos/mroach/4514830999/sizes/m/
The Simple Version on the Best Ways to Spend Money Abroad
- Specialist credit cards are normally the smartest way to spend abroad if you repay them in full.
- Tell your card company you`re going away to avoid your card getting rejected.
- Pay in the local currency using these cards.
- Your normal credit or debit card is probably rubbish.
- Take some cash – balance is important.
- Shop around – compare exchange rates for cash.
- Consider a prepaid card like Caxton Fx.
If you want to travel smart get either a prepaid card or a specialist credit card. Surely you don`t want to pay money to pay?