Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

travel icon with blue background

What are the best ways to spend money abroad?

Image of Ella Mower

Ella Mower

Content Writer
Advertisement

person laying on a sun-lounger on the beach

At a glance

  • When using a regular credit or debit card abroad, you could encounter hefty fees
  • Travel credit and debit cards, as well as prepaid travel cards, are just some of the alternatives you could consider
  • While cash may not be the safest option, it does have its uses.

From vibrant city breaks to relaxing beach getaways, wherever your travel plans take you this year, you’ll need to have access to cash. The good news is that there are multiple options to choose from when it comes to spending money abroad. Below are summarised some of the main forms of travel money, and their pros and cons, to help you decide which is best for you.

Travel Credit Cards

Can you use a credit card abroad?

While you can use your normal credit card to make purchases and withdrawals abroad, be aware that you may face fees for doing so. Non-sterling transaction fees, cash withdrawals fees and credit card interest are just some of the additional costs you may encounter. A travel credit card charging no foreign usage fees could help to avoid some of these extra expenses.

What is a travel credit card?

Travel credit cards work just like an ordinary credit card - the main difference being they incur little to no fees when used abroad. In order to secure the best rate you’ll still need a good credit score and, once you start acquiring debt, you’ll need to meet minimum repayments, which will include interest charges. Like all credit cards, they’re regulated by the Financial Conduct Authority (FCA), with Section 75 of the Consumer Credit Act (CCA) protecting purchases between £100 and £30,000.

Are travel credit cards worth it?

To decide whether a travel credit card is worth it, you’ll need to weigh up the pros and cons alongside your own individual needs and circumstances. Before committing, take time to consider the options available to ensure you’re getting the best rate possible. In our travel credit card chart, you can compare offerings from Barclaycard, Halifax, Virgin Money and more.

  • Fewer foreign usage fees
  • Purchase protection
  • Safer than taking cash
  • Can be used wherever your provider operates.
  • May still be charged for cash withdrawals from ATMs abroad
  • Not all credit card providers are accepted in some countries
  • Accumulates interest if balance not paid off in full
  • Can’t take advantage of favourable exchange rates – currency converted to exchange rate at time of purchase or withdrawal.

Travel Debit Cards

Can you use a debit card abroad?

Some service providers don't apply fees for overseas use on their regular UK debit cards. However, this isn't always the case, so you'll need to check with the bank that issued your debit card before using it abroad. Otherwise, you may incur hefty fees when using your everyday debit card on holiday.

What is a travel debit card?

As another way to avoid facing foreign usage charges, some service providers offer specialist travel debit cards that don’t impose non-sterling transaction fees and cash withdrawal fees. While some of these cards can connect to your existing current account, others will require you to open a new account.

 

Prepaid Travel Cards

What is a prepaid travel card?

A prepaid travel card can be loaded with multiple currencies and used to spend abroad. Although they work like debit cards, they aren’t connected to your bank account which could help to promote budgeting and prevent overspending, while also providing an additional level of security. Unlike credit cards, you won’t need a credit check in order to apply, making them a more accessible option.

Typically, prepaid travel cards will offer competitive or even no charges for foreign usage, which can make them a cheaper alternative to using a normal credit or debit card while on holiday. However, it’s important to keep in mind that prepaid travel cards aren’t regulated by the FCA in the same way as credit cards and, unlike travel credit cards, they don’t benefit from purchase protection.

How do prepaid travel cards work?

Once you’ve applied for and received your prepaid travel card, you’ll need to preload it with money in your chosen currency. Most providers will have a wide range of currencies available to choose from, including euros and dollars, with multi-currency cards allowing you to hold separate balances for each. The foreign exchange rate you receive will depend on your card provider but, as you can load money to the card in advance of your trip, you’ll have the opportunity to benefit from any favourable exchange rates before you leave.

When applying for a prepaid travel card, you may need to cover the cost of buying the card itself. It’s important to keep an eye out for hidden fees such as this, and to take them into consideration when deciding on the most affordable option. Other costs you may encounter include monthly or annual usage fees, fees for topping-up your card and any transaction fees for making purchases or withdrawals.

How quickly can I get a prepaid travel card?

How quickly you’ll receive your prepaid travel card will depend on how you go about ordering one. If a provider allows you to apply in branch, you may find you can take home your prepaid travel card the same day. However, if you order your card online, be prepared for it to take up to a week or more for your card to be delivered. For peace of mind, it’s always best to apply well in advance of your trip.

Can I buy a prepaid travel card for someone else?

Whether you can buy a prepaid travel card on for someone else will depend on the provider. If you’re looking to buy a prepaid travel card on behalf of a child, note that some providers will have a minimum age in place.

Are prepaid travel cards worth it?

Whether a prepaid travel card is worth it will depend on your attitude towards the advantages and disadvantages, as well as how you intend to use it. For instance, a prepaid travel card typically can’t be used to preauthorise payments such as hotel reservations and car hire. Furthermore, if you’re likely to overspend, you’ll need to assess whether you’ll have internet access or sufficient mobile data to be able to top-up the card via a website or app.

Below, find listed these and other pros and cons that may help you decide whether a prepaid travel card is worth it.

  • Holds multiple currencies at once
  • Offers extra security as is not connected to your bank account
  • Can benefit from favourable exchange rates before your trip
  • Doesn’t require a credit check.
  • Aren’t regulated by the FCA as credit cards.
  • Purchases aren’t protected under Section 75 of the CCA
  • Requires internet access or mobile data to top-up
  • Can have hidden fees.

Cash

Using a travel credit, debit or prepaid travel card is generally safer than carrying cash when it comes to spending money abroad. Having large wads of cash could make you a target for pickpockets and, if your money were to be lost or stolen, there is no way of recovering it or preventing it from being spent.

Nevertheless, cash can be useful for occasions where card isn’t accepted, to make low-value purchases, and to leave tips in restaurants.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

person laying on a sun-lounger on the beach

At a glance

  • When using a regular credit or debit card abroad, you could encounter hefty fees
  • Travel credit and debit cards, as well as prepaid travel cards, are just some of the alternatives you could consider
  • While cash may not be the safest option, it does have its uses.

Cookies

Moneyfactscompare.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.