Get a rate deal on holiday money

Tricia Phillips on how to make your hard-earned cash go further on a holiday abroad 

When using your card abroad, never accept the chance to pay in sterling. Always pay in local currency as it is cheaper
When using your card abroad, never accept the chance to pay in sterling. Always pay in local currency as it is cheaper

With just two weeks to go until the big British summer getaway, it’s time to get organised with your holiday spending money.

There are so many options on offer it is hard to work out which is the best way to take your money abroad – and which ones will leave you with less in your pocket.

Bob Atkinson, of, says: “Getting the right deal on your holiday money is just as important as finding the right price on your trip away. Spend a little time doing your homework and you can save up to 11% on the cost of changing your pounds into euros, dollars or any other currency.

“Our research shows the average family will spend £1,836 while away from home this summer and making the wrong choice could see them throwing away just over £200.”

Using the right card, buying your holiday money in the right place and not falling for retailer tricks could leave you with a bit more money for essentials such as excursions and souvenirs, duty-free purchases and meals and drinks.

Here are Atkinson’s tips to help you get the best deal on your hard-earned cash this summer:


Taking your money away in cash is the most straightforward option. In the old days you’d simply go to the bank but now you can buy currency in supermarkets, travel agents, the Post Office and at the airport.

Exchange rates and commissions are confusing and most of us don’t compare rates. With the difference between the best and the worst rate being as much as £11 in every £100 you spend, you could be throwing a lot of money away.

Ask one of two questions when comparing prices:

1. If you are planning on buying a set amount of currency, say 1,000 euros, all you need to know is which bureau is going to give it you for the lowest price in pounds.

2. If on the other hand you are going to change £1,000 into say euros, you want the place that gives you the highest amount of euros for your pounds.  The best place to find a deal is online. MoneySavingExpert has an online tool that checks out all the best cash deals. The worst rates are at the airport, although if you are running late you can prebook your money with Travelex to collect as you fly out, meaning you pay its internet rate.

Finally, don’t pay for your cash on a credit card as you will be paying interest from the moment you pick up your money. Use cash or a debit card instead.

Pros and Cons Easy to budget, and no need to worry about exchange rates on arrival. It’s not the best overall exchange rate on offer and, if lost or stolen, you have limited protection, even with travel insurance .


Just stick your card in a machine and the job is done. And with contactless purchases on the rise, it’s now even easier to pay.

But nearly every card issued to British consumers carries a series of hidden charges when you use them abroad, which you don’t see until you get your statement.

Charges are made for using ATMs to withdraw cash as well as for using a card to pay for things. These can add as much as 5% to the cost.

While currency loading, where your card issuer gives you a lower exchange rate, can add up to 2% to the final price you pay. Get round this by using the right plastic, a card designed for overseas use. These have no charges for usage and no exchange rate loading, meaning they usually beat the very best deals for cash.

The Halifax Clarity credit card has long been the best buy and is consistently the cheapest way to take money abroad. Capital One Extra, Santander Zero, Post Office, Nationwide and Saga are good alternatives.

Compare the best cards online at MoneySuperMarket and If you prefer a debit card, Norwich & Peterborough and Nationwide offer cards which are designed for use overseas, with very low charges and great rates. Pros and Cons Financial protection for your purchases when spending more than £100, no need to carry cash around and PIN protected.

Many cards have rip-off charges and fees attached, not accepted everywhere overseas and it’s easy to lose track of your spending.


These are the new travellers’ cheques, though they are far easier and much more flexible to use. You are issued a card, backed by Visa or MasterCard, and a PIN. Once you have loaded the card with money, you can use it just like a debit card at ATMs, in shops, bars, restaurants or any venue that accepts it.

You can’t spend what isn’t on the card, so there is no chance of going into debt and you can top up the card using either the internet or text while you are away.

Ensure you don’t end up with one of the bad prepaid cards on the market with charges every time you load, spend and withdraw. Some even have an inactivity fee if you leave money on them at the end of the holiday and even a fee to close the card and get your cash back.

Companies such as FAIRFX, Caxton and Travelex offer good deals.

Compare the best cards online with MoneySuperMarket and uSwitch. Pros and Cons Widely accepted overseas and you can’t go into debt – especially good for young travellers.

If you use them in different destinations, you may be charged further fees. Never use them as a deposit at a hotel or for car hire as it blocks the funds.


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