Dollars and cents

What is foreign currency & foreign exchange

By  

Foreign currency is the money used in other countries, such as euros and dollars.

Foreign exchange is the process of buying an amount of another country’s currency with your own. Exchange rates dictate how many dollars you would get in exchange for your pound, for example.

Exchange rates may vary from one provider to the next and there are often commission charges and handling fees to pay when exchanging your Sterling for foreign currency.

What is a credit card?

It’s a plastic card that gives the holder access to a line of credit from a lender. Each credit card holder has a credit limit and can use the card to pay for goods and services up to that limit.

The user is then billed for the balance accrued on the card, and interest may be charged if it is not paid off in full within an agreed period – although some cards offer lengthy interest-free periods on purchases.

Credit cards are a safe and convenient way of making purchases on holiday, fees and charges notwithstanding. Use the right card and it can be a more cost-effective way of converting currencies than travellers’ cheques or foreign exchange.

What are prepaid cards?

Prepaid cards are a lot like prepaid gift cards, in that you load money onto the card and then spend until the balance is depleted, or you top it up again.

You can load a prepaid card using cash, a bank transfer or another credit card. With a prepaid card you have a great deal of control over your spending and you can’t run into any debts as there is no credit facility.

What are travellers’ cheques?

Travellers’ cheques are one of the safest ways of taking money on holiday. You buy them in the UK and sign each one. You then use them on holiday and sign for the cashier to prove they are yours.

As with cash, you’ll get change in local currency if the cost of the purchase is less than the value of the cheque.

The great thing about travellers’ cheques is that if they’re lost or stolen, you can report them missing and get a replacement. Foreign currency is the money used in other countries, such as euros and dollars.

Foreign exchange is the process of buying an amount of another country’s currency with your own. Exchange rates dictate how many dollars you would get in exchange for your pound, for example.

Exchange rates may vary from one provider to the next and there are often commission charges and handling fees to pay when exchanging your Sterling for foreign currency.

Close

Cookie use

We use cookies to give you the best experience. By using our website you agree to our use of cookies in accordance with our 

Cookie Policy .

Read more

Cookies are harmless files which can help improve the experience. Cookies allow websites to respond to you as an individual. The website can tailor its operations to your needs, likes and dislikes by gathering and remembering information about your preferences.

Read less

Close