Alternative Travel Money Options
If you’re heading off on your holiday soon, and you’ve taken care of your travel insurance - make sure you’re getting the best deal when it comes to your spending...
We all know that the last minute travel money dash at the airport is one of the most expensive ways to get your travel money. A quick check today showed rates at Newcastle International Airport were €1.06 per £1 compared to €1.085 if you picked it up in town through high street retailer Debenhams (correct as of 17th August 2017). But there are alternative to buying on the high street — if you’re a little more organised.
With that in mind, here are some ways to make your travel money stretch a little further by using some companies you might not have heard of yet:
Credit cards specifically for foreign exchange
A credit card might not be your first thought as an alternative to cash, but a few credit cards offer foreign exchange without adding a fee, and can offer a pretty attractive exchange rate.
Bear in mind that while spending on these cards might be OK, and highly convenient, withdrawing cash on a credit card is can be viewed negatively from a credit scoring perspective, so be wary if you plan to withdraw cash frequently. Another great benefit of credit cards is that they’re often required for car hire abroad.
The Halifax Clarity credit card is consistently rated as one of the best credit cards on Smart Money People, and is free to use abroad whether you're picking up some holiday souvenirs or making a cash withdrawal. It’s become (in)famous for being one of the best “holiday credit cards”.
Dedicated prepaid cards with no/reduced fees
A growing area is prepaid cards. They differ from credit cards in that only money which has been specifically added to the card can be spent. One of the reasons these cards have grown in popularity is that using them abroad is often cheaper than a regular account, or in some cases free.
Monzo has been most successful in this regard, with their prepaid card completely free to use anywhere in the world, at the MasterCard exchange rate. It’s all wrapped up in a super easy to use app, too which has helped its recent growth in popularity.
Alongside the Monzo card, which is really a pre-cursor to the full bank account they're currently rolling out, there are some specialist travel-oriented cards which are made for sending, receiving, and spending money abroad.
Revolut is handy for sending money abroad, and it’s also free to use while abroad. Cash withdrawals are also free, though limited to £200 per month.
WeSwap is also free to use abroad, but but ATM withdrawals carry a £1.50 charge so try and minimise these where possible. Another prepaid card, Cashplus is completely free to use, but £5.95 to buy initially, so work out whether or not you’d save more than that in fees. The ICE Travellers Card is also completely free to use, however loading money to the card carries a 2.85% charge. Work out an estimated spend for your holiday, and choose a card accordingly.
UK current accounts with no fees
Our pick of the cash alternatives for their sheer convenience (provided you already have an account), are regular UK current accounts which offer completely free transactions abroad.
Starling Bank, one of the new breed of app-based challenger banks, is free to use abroad, whether spending, or withdrawing cash. Several of the up and coming banks are looking to banish foreign transaction fees - helping them to differentiation in a banking world were heavy fees for paying for your sangria and paella has become fairly common.
Similarly, if travelling in Europe, Metro Bank is completely free to use, however fees outside of the EU can vary vastly.
Finally, the Virgin Money basic current account offers completely free transactions when spending abroad, though cash withdrawals carry a £1.50 charge. Handy for those who only have access to a basic account and therefore might struggle to be approved for a credit card. One tip for spending abroad is to always pay in the local currency: if the option is presented, more often than not, the local currency will be at a better rate.
If you’ve left it too late and there is no other option, cash doesn’t have to be the worst deal. You might not be able to secure the best rates by planning ahead of time, but cash remains highly convenient, and as secure as you make it. Just don’t get it at the airport — pre-order for collection as this nearly always guarantees a better rate, and (generally) don’t change your cash once your at your destination.
Another thing to remember is not to buy cash at the bureau de change with a credit card, as this is often treated by credit card companies as a cash withdrawal on a credit card — which as discussed above can be both costly in terms of price, and could also impact your credit score.
Travel money reviews
With a huge range of options and companies offering travel money options, be sure to spend a little time to do some research on which payment methods, and which company will help give you the best rates for your travel money.
Don’t forget to start your research by reading credit card reviews, prepaid card reviews, and travel money reviews on Smart Money People, and be sure to check out the British Bank Awards 2018, where we’re adding “Best Travel Money Provider” as new categories. So until we crown the winners in March 2018, be sure to add your travel money reviews today!