How to get cheap travel money
Heading on a trip abroad? Enjoy your time away without fear of getting stung on travel money. From bad exchange rates to sneaky fees, here's how to get the best deal on foreign currency.
Whether you're holidaying away, studying abroad or splashing out on online payments in a different currency, poor exchange rates and hidden charges can quickly eat into your cash.
Working out the best ways to spend money other than sterling can be a headache. But, we know of some super simple tips to make the whole process much easier.
Don't let money worries interfere with your time overseas. Here are the tips you need to cut costs and make your money go further.
What's on this page?
What are exchange rates?
Exchange rates tell you how much you'll get when you convert one currency into another. Rates can change massively from day to day (and even hour to hour), so you can never be exactly sure how much you're going to get.
There are two separate rates worth knowing about: how much it'll cost to get your travel money and how much it will be to return your unused cash. Some outlets also charge a commission (their price for doing the conversion).
You can check out what the current rates are on all currencies at the post office, a travel agent, bank or exchange bureaux.
Understanding exchange rates
If 1 GBP buys you 1.5 USD, you'll get one and a half US dollars for every pound you convert. So if you go in with £100, you would walk out with $150.
While that might sound like you're getting extra cash, remember it boils down to how much things actually cost at your destination. A coffee might cost you £2.50 in the UK, but you might be charged $5 in the US for the same cup, so don't get too excited!
Should you pay in cash abroad?
Credit: Syda Productions - Shutterstock
You might be tempted to exchange your cash before you fly to keep things simple, but it's definitely worth knowing the pros and cons involved first.
Pros of carrying cash on holiday
- You've got cash in your hands as soon as you land
- It's handy for taxis, snacks or city taxes
- It can make it easier to keep tabs on how much you're spending
- There are no fees (other than commission when you buy it)
- It's easier to haggle with cash.
Cons of carrying cash on holiday
- The exchange rate is fixed the day you convert
- There may be extra charges if you pay for your currency with a credit card
- You'll likely want to pack as light as possible and keep anything bulky or valuable (like money!) in the UK, safely in storage
- It's easier to lose
- You might end up having to fork out for others in cash-only situations
- It can feel unsafe carrying too much cash around, and if you lose any, it's likely your travel insurance won't cover all of it (if any).
Whether you get it all at once or convert it as you go, shop around for the best rate. Remember that you might have less choice once you hit the airport/get abroad.
Watch out for any extra commission/charges – or, just as bad, 0% commission but a poor rate of exchange.
Best app-based banks to use abroad
Here are a few app-based bank accounts to consider for overseas spending:
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Chase
Chase, one of the biggest banks in the USA, is now also available in the UK. On top of getting 1% cashback on almost all purchases in the first year and the option to gain interest on your savings, Chase is also a great option for travelling.
They don't charge any extra fees for spending money abroad and use Mastercard's exchange rates.
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Starling
Starling Bank is ideal to use for overseas spending as they charge no fees for withdrawing or spending abroad.
Plus, with Starling, you have the added security of being able to lock and unlock your card directly from the app. So, if anything were to happen to it while you're away, you can instantly protect the money in your account.
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Revolut
With the Revolut app, you can open a current account in minutes. Then, once you've got an account, you can use their handy budgeting features to manage your money from your phone.
Revolut lets you spend abroad in over 140 currencies. From 7th June 2023, there will be a fee of 1% (up from 0.5%) when you spend over £1,000 a month. And, they use interbank exchange rates, so their rates are the same as the ones banks give to each other.
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WeSwap
WeSwap (as the name suggests) 'swaps' your currency with other people around the world at interbank rates (supporting card payments and ATM withdrawals in over 180 countries).
While WeSwap isn't technically an app-based bank, they're an app-based money service which offers a prepaid card for you to use abroad.
Swaps cost 2.49%, and withdrawals are free up to £200, then 2% on anything above that.
App-based banks can make it so much easier to spend money abroad. They often offer fee-free spending abroad and come with added features, like real-time notifications on your phone and budgeting tools.
Look out for ones with no or low fees for spending abroad.
However, be careful to avoid any overdraft charges, and check to see if there are limits on the cash withdrawals you can make each day.
For in-depth info on this, check out our guide to the best app-based bank accounts.
Should you use credit cards abroad?
Standard credit cards usually work out more expensive pound-for-pound because of extra charges added on when you use your card abroad. But, some travel credit cards can be worthwhile as they scrap the overseas charges.
Credit cards have the advantage of Section 75 protection on purchases that cost over £100 and up to £30,000.
Also, some have no added fees for overseas spending.
However, check the T&Cs carefully before getting a credit card to use abroad. Some cards can charge transaction fees, so look out for this.
You need to keep an eye on interest added to any spending and withdrawals. Always make sure you can repay in full and on time.
If you're thinking about getting a travel credit card, here are a couple of options:
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Barclaycard Rewards Card
The Barclaycard Rewards Card has no fees on overseas spending. It also doesn't have charges on withdrawals, as long as you pay off the card on time every month. Just make sure the ATMs you use don't charge.
And, better yet, you'll get 0.25% cashback on your everyday spending.
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Halifax Clarity Credit Card
It's also worth looking into the Halifax Clarity Credit Card. It has no fees for withdrawals or spending in the UK or abroad.
As with all credit cards, make sure to pay it off before the due date each month or you'll be charged interest.
Note: You may not be eligible for these credit cards based on your credit rating. If this is the case, you can see more options in the table below, including other options for Barclaycard and Halifax credit cards.
But, to find out how to check and improve your credit rating, have a look at our guide. It could really help you to be eligible for one of these travel credit cards.
Always do plenty of research before getting a credit card.
More credit cards and their overseas charges
| Bank | Foreign spending | £50 spend could cost | Withdrawals | £50 withdrawal could cost |
|---|---|---|---|---|
 | 2.95% | £1.48 | 2.95% + 5% cash fee | £3.98 |
 | 2.75% | £1.38 | 2.75% + 3% cash fee (min. £3) | £4.38 |
 | 2.95% | £1.48 | 2.95% + 3% cash fee (min. £3) | £4.48 |
 | 2.99% | £1.50 | 2.99% + 2.99% cash fee (min. £3) | £4.50 |
 | 2.99% | £1.50 | 2.99% cash fee (min £2.99) | £2.99 |
 | 2.95% | £1.48 | 2.95% + 5% cash fee | £3.98 |
The table shows how much you'll be charged each time you use your card, along with rough costs for spending or withdrawing the equivalent of £50.
How each bank sets its exchange rate, the type of card and how long you take to repay could affect the overall cost, as could any ATM or retailer fees abroad. Always confirm the details for yourself.
Using a debit card to spend money abroad
Most students have a debit card, making them an attractive option for taking away on holiday. But again, look out for the charges and think carefully about whether it's the right way for you to spend money abroad.
Debit card overseas charges
| Bank | Foreign spending | £50 spend could cost | Withdrawals | £50 withdrawal could cost |
|---|---|---|---|---|
| 2.99% + £0.50 | £2.00 | 2.99% + £1.50 cash fee | £3.00 |
| 2.75% | £1.38 | 2.75% | £1.38 |
| 2.95% | £1.48 | 2.95% | £1.48 |
| 2.75% | £1.38 | 2.75% + 2% cash fee (min. £1.75, max. £5) | £3.13 |
 | 2.99% | £1.50 | 2.99% | £1.50 |
| 2.99% + £0.50 | £2.00 | 2.99% + £1.50 cash fee | £3.00 |
Again, the table shows how much you'll be charged each time you use your card, along with rough costs for spending or withdrawing the equivalent of £50.
As we mentioned with credit cards, the overall cost can be affected by how each bank sets its exchange rate and the type of card, and there may be ATM or retailer fees abroad. It's important to always check the T&Cs carefully.
6 tips for spending money abroad
Here are a few extra travel-money tips to help you get the most out of your trip:
- Consider splitting holiday money across cash and cards so you've got a backup in case of loss or theft.
- You can withdraw other currencies from some ATMs in the UK, but you'll still have to pay any foreign transaction fees.
- Let the bank know you’re going abroad. If they see any foreign transactions happening they could assume your cards have been stolen and block them.
- You may be offered the choice of paying in Sterling on your card while abroad – don't be tricked! It usually works out much more expensive.
- Don't let cards out of your sight when paying (for example, don't let a waiter walk off with your card in the handheld machine), and always check receipts carefully at the time the transaction is made.
- Only ever withdraw cash with a credit card in a genuine emergency. As well as the extra fees for foreign use, you could start accruing interest straight away. Either way, it's a banker's bonus that you shouldn't be paying for – ditch it!
We've got good news – there are lots of great reasons to add travelling to your CV and impress your future employer.
