Cheap travel money tips
The cheapest ways to get foreign currency & spend overseas
Many people are dusting off their passports after the pandemic, whether for a bit of sun, a city break or an amazing overseas adventure. Yet many treat how to pay when they're abroad as an afterthought – even though doing it wrong can cost them £100s. This guide compares the four main options to get the most bang for your buck when overseas.
Travel money need-to-knows
Get this wrong and you'll end up paying to pay.
Here's how much spending €1,000 can cost, in pounds, using each of the different methods (we've assumed five €100 cash withdrawals and 20 transactions of €25 each on the cards).
- Top specialist credit/debit card repaid in full: £818
- Cash, via cheapest bureau (must pick up in London): £821
- Cash from M&S on the high street: £829
- Using a debit card with a spending charge: £872
- Changing cash at airport (without ordering it): £949
The winners are clear – apply for a specialist overseas card, then use it every time you go.
Many overseas hotels, shops and ATMs ask this when you pay by card. If you choose pounds, the retailer does the currency conversion, but rates can often be pants compared with letting your card do it – see the euro analysis from MSE founder Martin Lewis for how this worked for him.
If you've got a top overseas card, ALWAYS choose the local currency, as your card does the exchange and it's unbeatable.
If you're using a bog-standard credit or debit card, it's touch and go. Sometimes the card machine will show you the 'non-sterling cash fee'. If this is under 2.5%, go with pounds. If it's over, pick the local currency.
3. Never blindly use your existing cards overseas – check what they charge before you go (and find a cheaper alternative)
Never just spend abroad with ANY card – use our tool below to find out what it'd cost you to pay with your existing plastic before slipping it into your suitcase. Then compare that with our top-pick travel cards which don't charge, so you're armed with the cheapest way to spend before you set off.
Let's make this plain: don't use the cards in this section for spending overseas. Unless you're spending euros in the EU, Iceland, Liechtenstein or Norway, the cards below charge 50p-£1.50 for transactions on top of their normal exchange-rate charge.
Imagine you buy something for the equivalent of £5 in a shop in the USA. With the worst of these cards, it can end up costing £6.60 with the fee and charges.
Clydesdale/Yorkshire Bank (ii) None 3.75%, min £1.50 (iii) 2.75%, min £1.50 (iii) Intelligent Finance (ii) 2.25% £1.50 £1.50 TSB 2.99% 1.5% (min £2, max £4.50) £1 Bank of Scotland 2.99% £1.50 50p Lloyds Bank 2.99% £1.50 50p Halifax 2.99% £1.50 50p (i) Except on payments in euros within EEA. (ii) Existing customers only. (iii) Except on transactions in euros, Swedish krona and Romanian leu within the EEA.
Use a credit card to buy currency at a bureau de change or online through our TravelMoneyMax comparison tool and you risk falling foul of a hidden charge.
That's because buying currency is counted as a cash withdrawal, so you could face a myriad of fees. These include cash withdrawal fees, interest or even a charge from the currency exchange for using a credit card.
Some card providers also treat loading a prepaid card using a credit card as a cash withdrawal.
So if you're buying currency or loading a prepaid card, ALWAYS use a debit card, which isn't allowed to charge this fee, or withdraw cash and pay with that instead.
Many car hire firms won't accept a debit or prepaid card when you come to pick up your car, and will instead need a credit card. As you'll usually be paying (or leaving the deposit) in the foreign currency, and this can be a substantial amount of money, a specialist overseas card is particularly good for this.
Are you part of the 'overseas wallet or purse' club? Martin's pioneered this, and it's a clever way to make sure you're prepared on holiday. His rationale is that there are some things you only need when abroad:
- Specialist overseas plastic. These tend to be pretty poor for UK use, so leave it in your overseas wallet until you go away.
- Free GHIC/EHIC for emergency medical issues in Europe. See our guide on how to get or renew your free GHIC/EHIC card.
- Driving licence & international driving permit. Check out when and why you need to take these in our full Driving licence renewal guide.
- ESTA number for US travel. Check out our ESTA application guide.
- Leftover currency. Left over from previous trips – good if you can't get to a cash machine right away.
- Specialist overseas plastic. These tend to be pretty poor for UK use, so leave it in your overseas wallet until you go away.
The best travel money options
Which type of travel money you should use mainly depends on your preferences as each has advantages and disadvantages. There are four main forms of payment to choose from:
Spend on a credit card abroad and normally your card provider gets near-perfect rates, but then adds a 3%-ish 'non-sterling exchange fee'. This means that every £100 worth of euros or dollars costs you £103, and some add even more fees on top.
Specialist credit cards don't add this, so you get the same rate the bank does. Yet ONLY use one if you set up a direct debit to repay IN FULL each month or the interest dwarfs the exchange rate gain. As with any credit card, you'll need to pass a credit check to get a travel credit card.
✔️ You want near-perfect exchange rates
|⚠️ You've a poor credit score|
|✔️ You want Section 75 protection||
⚠️You won't repay IN FULL every month
See our Top travel credit cards guide for full info and more options, though our two top picks are below.
|Bear in mind that a travel debit card could be cheaper. If you're happy opening a new app-only current account and loading funds before you go, you can get near-perfect exchange rates and up to 1% cashback on most spending worldwide with a top travel debit card.|
|The top pick as it charges no fees or interest on spending AND overseas cash withdrawals, provided you repay in full. Plus there are a couple of perks – you get 0.25% cashback on almost all spending and it also gives five months' free access to Apple Music, Apple Arcade, Apple News+ and/or Apple TV+. Just remember to cancel after the five months if you don't want to pay the subscription fee.|
|The Halifax Clarity is a long-term top pick as it has no fees on overseas spending and low ATM interest. You don't get charged interest on spending abroad as long as you repay IN FULL, but you will if you make cash withdrawals (about 5p per £100 per day) – so try to minimise these.|
Warning. Withdraw cash on a credit card and it's marked on your credit file
Withdrawing cash on some of the top specialist overseas credit cards is usually a cheap option. However, it can have unintended consequences as it's recorded on your credit report. This isn't necessarily bad, but if you apply for a loan or other credit soon after, the new lender might see it as a sign that you've no cash and you're so desperate for it, you're willing to pay high interest to get it.
In isolation, the negative effect of withdrawing cash is minor and shouldn't be the root cause of a lender rejecting you. But if it's combined with other negatives on your credit report, it doesn't look good. To be safe, if you've an important credit application to make, such as a mortgage, it's probably worth avoiding withdrawing cash on your credit card for the few months before the application.
See Withdrawing cash on a credit card for full information.
You can also get debit cards that don't charge 'non-sterling transaction fees'. Here, you usually need to apply for a new bank account. But, unlike with the credit cards above, our top picks only do a 'soft' credit check, which means the application for the card itself won't affect your ability to get credit in the future.
If accepted, you can just use these as a secondary bank account without switching bank, but unlike with a credit card, you will need to pay cash into the account before using it, which some may find a pain.
✔️ You're happy to open a (new) bank account to get one
⚠️ You switch from a better account to get one
|✔️ You frequently withdraw cash, as there are no charges||
⚠️You want Section 75 protection (though they do allow chargebacks)
For more information and the full list of debit card options, see Top travel debit cards. Our two top picks are...
Fee-free spending and cash withdrawals worldwide, plus activate 1% cashback for 12 months. Unlike the credit cards above, Chase only runs a 'soft' credit check when you apply – so there's no permanent mark on your credit report.
If you're thinking of switching to Chase, or using it as your main bank account, read our full Chase review.
- 1% cashback on spending for one year, once activated in the app
|Fee-free spending and cash withdrawals anywhere in the world. Like the Chase account above, Starling only does a 'soft' credit check, unless you apply for an overdraft – so if you don't get one, there won't be a permanent mark on your credit report.
If you're thinking of switching to Starling, or using it as your main bank account, read our full Starling review.
- ATM limits: six withdrawals a day, max £300/day
Here, you load with cash before you travel, then use it like a debit card. If you lose it, you can call the provider to block the card and protect your cash.
Prepaid cards' big advantage is that you can choose to exchange cash in advance, locking in a rate, rather than getting the exchange rate when you spend as you would with a credit or debit card. This means you'll know exactly how much you have to spend in the foreign currency during your trip, but will also mean you're subject to currency fluctuations – for better or worse.
However, there are a few places that don't accept them – car hire firms and pay-at-pump petrol stations are the major ones, but there are a few others to watch out for.
✔️ You want to lock in a rate
⚠️ You want the absolute best rates
|✔️ You want to stick to a budget||
⚠️You need to pay by credit card (for example, you need to hire a car)
|✔️ You lose it/it's stolen (unlike cash, your balance is protected if you report it immediately)||⚠️ You want Section 75 protection (though they do allow chargebacks)|
Our TravelMoneyMax tool compares foreign exchange rates at about 16 online bureaux and orders them by how much currency you'll actually get after all fees and charges.
Though beware, pay a UK bureau by credit (not debit) card and it counts as a cash withdrawal, so there's a fee and interest even if you fully repay – best to always use a debit card or cash to buy.
You have a few options if you've a few leftover coins or notes after your trip...
- Save it for your next trip. If it's a common currency from a country you'll go back to, then just store it safely at home ready for your next trip.
- Find a friend (or a friend of a friend) who needs that currency. If you won't go back, but your currency's for a common holiday destination, see if you've friends, or contacts on social media groups, planning a trip there. If so, look up the 'spot rate' (perfect rate, eg on XE.com) and agree to sell at that price, then you both win.
- Sell it back to a bureau de change. Sometimes if you bought currency from a particular place, it'll give you a buyback promise at a preferential rate. Yet, if this is what you're doing, always check the Buyback tab on MSE's TravelMoneyMax currency tool, to make sure it's a good deal.
This won't be the case if you just returned from a trip, but if you have other currency from previous trips, and it's old, or even defunct (eg French francs), check out MSE Rhiannon's leftover currency blog, where she has tips of companies that may buy it from you - though don't expect to get paid what it's 'worth' at face value.
Quick questions on buying currency
Martin weighs up whether you should buy holiday cash before going on your tripEmbedded YouTube Video
Without a crystal ball, no one knows if the pound will be stronger or weaker in the future. Anyone who tells you otherwise is merely speculating.
If you're concerned about currency volatility before you head away, you could choose to buy half now and half later. Do this and you'll be less affected by currency swings.
Whether you buy now or later, the key is to get the best possible rate at the time.
Far better that you use TravelMoneyMax before you go or, if you've left it too late, at least order in advance online to pick up at the airport to get better rates.
In general you don't get a better rate changing your pounds to euros, dollars, lire or dong once you're in that country than you do here. Yet that doesn't mean there aren't a few local bureaux overseas that may give tip-top rates.
The problem is there's no way of knowing until you're there, and as rates vary every day, once you're there, comparing with what was available back home is tough.
Therefore we suggest for safety you sort it before you go (if you can – some currencies, such as the Lao kip, aren't available outside the country). The big advantage of that is you can use TravelMoneyMax to find the best rate from about 16 bureaux.
And getting a top rate here should usually beat relying on an unknown rate from a one-off local bureau once you're there.
Clever ways to calculate your finances