Travel Money
What is Travel Money?
This is the money that is generally in use and accepted in a country different to where you live. For example in the UK there is British pounds (£) but in America there is the US Dollar ($), in most of Europe there is the Euro (€) and in Japan there is the Yen (¥) to list a few. There are 180 recognised currencies worldwide.
How can I get Travel Money?
Here are a few ways to get Travel Money:
- Currency exchange through a money exchange
- Debit and Credit cards
- Withdrawing cash from an ATM
- Prepaid cards
- Travellers cheques
What is the cost for getting Travel Money?
The key when obtaining cash in a different currency or spending money on a credit or debit card, not issued in the country your spending in, is understanding the cost of converting one currency to another. This cost is not always clear. There are two ways you can be charged for currency conversion:
- A Fee or Commision
- A “Loaded” Exchange rate
Sometimes both and sometimes none are used, so it pays to know the best way to convert currency depending on your situation.
What’s the best way to get Travel Money?
The best time to get currency exchanged is when you can get the best rate, rates fluctuate based on many things and for the average person monitoring this is impractical. Depending on how organised you are one option could be to start looking at the rates 6 months in advance. You could try taking current years high and low and then the last 5 years trend for the currency you want to exchange, see where the current rate sits between this years high and low and then looking at the 5 year trend see if you think the rate is likely to improve or worsen. Once you decide it’s time to buy it’s best to find the Money exchange with the best rate relative to the actual rate (no rate loading in other words) and the lowest fees and/or commission and you should be getting the best bang for your buck!
Try comparison sites when looking at currency exchange more than 5 days in advance as you’ll find better rates online with delivery options to save unnecessary travel or collecting at an airport where the rates are never the best.
A second option if the above sounds a bit too much like hard work (it is normally for a holiday after all) is to get a no fee/commission and no loading card, there are credit and debit cards available for this but they can be applied differently depending on where in the world you are.
When in europe there a debit cards available that allow you to spend and withdraw currency without incurring fees/commissions and there is no loading of the exchange rates. Credit cards are available for spending in europe with the same benefits but I would strongly advise against withdrawing currency because this will be chargeable and you may also incur interest on cash advances which quickly erode any gains.
Finally for worldwide currency exchange via plastic you will be hard pressed to find a debit card so cash withdrawals are unlikely to be an option but spending on credit cards can still be done with fee/commission or loading.
To find these cards search “overseas spending cards”.
Remember that you get greater protection on credit card spending over £100 and up to £30k via section 75 of the Consumer Credit Act. You can also get protection on your debit card via the chargeback scheme but this is voluntary and once over £100 it’s better protection if spending on a credit card.
