Best ways to spend money abroad: our money saving tips
Take the pressure off when travelling abroad and sort out your finances to get the most out of your spending
Traveling abroad can be an exhilarating experience, but it also comes with its own set of financial considerations. One of the most important aspects to plan for is how you'll manage your money while overseas. With various options available, from credit cards to prepaid cards, and even the less common travellers' cheques, it's essential to understand the pros and cons of each to make the most of your travel funds.
Understanding currency exchange
Before you jet off to your destination, it's crucial to grasp the basics of currency exchange. The amount of foreign currency you get in return for your money will depend on the exchange rate being offered by the converter. The higher the exchange rate, the more foreign currency you’ll get for your money. This simple principle is at the heart of all your travel money transactions.
Timing your exchange
To ensure you get the most bang for your buck, it's advisable to buy your travel money when the exchange rate is favourable. Monitoring currency trends can be beneficial, as rates fluctuate due to various economic factors. Purchasing your currency when the rate is high means more spending power once you're abroad.
Credit cards are a popular choice for travellers due to their convenience and wide acceptance. A travel credit card abroad works just like it does back home; you have a set credit limit and can use the card for purchases up to that amount. However, once you reach your card's limit, you'll need to pay off the debt to continue using it.
Advantages of credit cards
They often offer great money exchange rates.
Using them responsibly can improve your credit score.
They are more secure than carrying cash; if lost or stolen, cards can be blocked.
Drawbacks of credit cards
You may encounter foreign usage charges.
Cash withdrawals can attract interest and impact your credit score.
A charge of around 3% may be applied to the amount you spend on the card.
For those who prefer to stick to a budget, prepaid cards are an excellent option. These cards are loaded with money in advance and used like a regular card abroad, circumventing foreign exchange fees. Moreover, the exchange rate is locked on the day the card is loaded, not when it's used.
Advantages of Prepaid Cards
They are among the cheapest options for spending abroad.
Prepaid cards facilitate tracking spending and budget management.
Drawbacks of Prepaid Cards
Some cards come with an application fee.
A top-up fee, typically around 3%, may apply.
Inactivity fees might be charged if the card is not used.
Despite their benefits, some cards still incur transaction fees overseas.
Although their popularity has waned, travellers’ cheques can still be a safe way to carry money abroad. Available from select exchange offices and post offices, they require your signature and a set amount assigned to each cheque.
Advantages of travellers’ cheques
They are one of the safest ways to carry money.
If lost or unused, they can be refunded.
Drawbacks of travellers’ cheques
They come with commission charges and less favourable exchange rates.
Converting cheques into currency incurs a flat fee.
When do you buy your holiday money?
To avoid the sting of poor exchange rates, especially at airports, it's wise to buy your travel money well in advance. This allows you to compare rates and deals from different providers. Remember that currency exchange offices have their own limits on travel money purchases, and carrying more than €10,000 in cash requires a customs declaration.
Thing to consider
When spending money overseas, there are a few key points to keep in mind:
Check if your existing bank accounts offer good deals on foreign debit card use.
Ideally, load prepaid cards with a debit card to avoid additional fees.
Always opt to pay in the local currency to sidestep dynamic conversion charges.
Factor in commissions from foreign exchange companies when comparing rates.
Compare travel money
Travelling abroad comes with a whole host of considerations to make. One of the most important being how you’ll be spending money. Whether you opt for purchasing travel money at your local bureau de change or are considering a travel credit card - it’s a good idea to keep an eye out for the best offers available on our comparison tool and compare travel money.
We compare the best currency exchange rates on offer, to get you the best euro rate or US dollar. it’s a good idea to start shopping around a few weeks in advance and do regular currency exchange comparisons online before your holiday to make sure you benefit from the best rates available. Currency comparison is easy - simply pop to our currency conversion comparison and lock in the best rate when you see it.
For the best travel credit card, simply tell us a few things about yourself including your financial situation and preferences and we’ll provide you with a tailored list of options to benefit from so you can compare travel money with easily.