Dan's Adventure

Whether you are going away for a week or a year, it pays to know how to get more foreign currency for your money. It makes sense to get the best deal on foreign currency before you leave and to have a cost effective means of managing your travel money whilst abroad.

Before departing, shopping around for the best exchange rate can save you a considerable amount of money, especially if you are exchanging larger amounts. In general, banks do not offer the most competitive exchange rates. Travel Money Max can help you find the best offers for exchanging your money. As an example, exchanging £2500 into USD yields results varying by as much as $100. The worst thing you can do is to wait to get your foreign currency at the airport. Ordering it online from a company with a pickup point at the airport is still likely to save you money.

Carrying lots of money around with you obviously isn’t the smartest choice, so travellers need some options on how to get access to money when abroad. Most banks and credit card companies see this as an opportunity to make extra money, but fortunately there are a couple out there that still have what’s best for the customer in mind.

Many high street banks advertise 0% commission on travel money with their bank accounts, but this does not necessarily mean that they are a good deal. What may not be obvious is that most load on extra charges for both cash withdrawals and purchases when the cards are used abroad, typically around 3% and usually with a minimum charge of a few pounds. As a one off, the charges aren’t a lot, but over a period of time, they really start to add up. The charges are however avoidable. In the UK, Nationwide offer two current accounts, one with a Visa debit card and the other a simple cash card. The Visa debit card account passes on the 0.84% Visa levy when used outside Europe, but adds on no other charges. The cash card account has no charges at all, but cannot be used for purchases.

Similar to bank accounts, credit cards will usually charge you for using them abroad. One exception to this is Santander’s Zero credit card which does not charge for cash withdrawals or purchases. It does however have a relatively high interest rate, so unless you are able to pay off your balance every month, it probably isn’t a wise choice.

If you are unable to get a Nationwide current account or a Santander Zero card, another option is to use a travel money card. Several companies, such as Travelex, offer cards which you can pre-load with money and then use in the same way as you would use a normal bank or credit card. When you load the money onto them, the exchange rate is fixed, then when you use it you will incur a charge every time. Whether this is a good option for you depends on how the charge compares to that of your bank or credit card. An advantage is that since the rate is fixed at the time of loading, your money will not be subject to drops in the exchange rate, but conversely you will not benefit from it improving until you add more money.

As you can see, it pays to investigate your options for travel money rather than just assuming that your current account and credit card offer good rates. I have recently opened a Nationwide account for travelling because my current account is one of the worst for adding charges, so over the course of a year, the Nationwide account will save me a lot of money.