On your travels? Four top ways to boost your holiday cash

Don’t get caught out by sky-high fees. Get the top debit and credit cards to use abroad and find out how to cut costs when you need to splash the cash

Whether you are booking a day trip or paying for a round of drinks, it makes sense to think about the best ways to pay for your outgoings on holiday before you jet off. Just as at home your main options will be paying with cash or using debit or credit cards but when spending overseas costs will vary and the best option isn’t always clear cut.

Credit and debit cards can be the cheapest way to spend, providing you access to almost perfect exchange rates. But if fees and charges are levied on top, they can become the most expensive – it all depends on what card you use.

Yet while many countries are becoming increasingly cashless (with Sweden predicted to have gone all the way by 2023), cash and coins should still have a place in your holiday wallet. From tipping to shopping in markets, there will always be some transactions that require cash.

In some far-flung places, you might find cash is your main or only option. But swap your money at the wrong place and you could pay more than you need.

So how do you get the best rates with cards and cash?

1 Choose the best cards for overseas spending

Most debit and credit cards will charge an assortment of fees. Take TSB’s standard current accounts, for instance. Use one of these abroad and you’ll get hit with a 2.99% conversion fee and a £1 transaction fee. This works out as £3.99 for a £100 spend, so roughly 4%. But spend £15 and the fee is £1.44, a huge 9.6% . It is a similar story at most other banks, and this happens each time you spend.

Fortunately, a small number of banks offer fee-free spending abroad via specific debit or credit cards. The exchange rate you’ll be given will be the one offered by Mastercard or Visa on the day the transaction is processed, which might not be the same day as the purchase is made. These rates are very close to the ‘interbank’ rate [the price at which banks conduct wholesale foreign exchange transactions], and there’s generally not much difference between them.

This means when you spend with one of these cards you’re getting as close as possible to the real exchange rate, which comes with some considerable savings.

See the table below for the best debit and credit cards to use abroad, along with a couple of alternatives.

To pick the right one, you need to consider a few factors.

There are some advantages to picking a credit card for overseas spending. For a start, you can use it for car hire and hotel bookings where you need to pre-authorise potential additional payments. There is also additional consumer protection for any purchases over £100, thanks to Section 75 of the Consumer Credit Act. Two of the cards featured, Barclays and Tandem, also offer cashback, meaning you can make money from your spending at home and abroad.

However, you will need to have a credit check when you apply for a credit card. There is also the threat of interest charges if you don’t clear the balance in full each month, so you must be confident you can afford to pay it off in time.

Debit cards on the other hand, from the likes of new digital banks Monzo and Starling, will better suit those who either don’t want or can’t get credit cards. Unless you request an overdraft, there is no hard search on your credit file.

A small number of banks offer fee-free spending abroad

They both also send instant updates on your purchases through to your smartphone, so you’ll know exactly what you have spent in both the foreign currency and pounds.

There is no need to switch away from your existing bank to get one of these, though you will need to ensure you transfer enough money over in order to spend it. However, they do not have many branches here to pop into and may have limited support via phone lines.

There are a couple of alternatives to consider.

First is the Curve smart card, which works in the same way as a digital wallet on your phone and is similar to PayPal – except you have a physical card to pay with. This can be linked to any other Mastercard or Visa you have (there is currently no integration with Amex). Any payment you make with your Curve card is charged to the underlying card – but without the foreign transaction fees. So it is a good option if you would rather stick with your existing debit or credit card than get a new one. However, there is a monthly cap of £500 spending abroad, so it is better suited to city breaks and weekends away than fortnights in the sun. If you breach that sum, you will be charged a 2% fee. ATM withdrawals are free up to £200 per rolling month.

The second option is a prepaid card. You will get hit by a fee on your exchange, though WeSwap won’t add any charges when you then spend the money, making it cheaper than most others.

The main advantage of this type of card is you can lock in money at the rate offered when you exchange. This can be useful if you want to hedge your bets against falls in exchange rates. They can also be handy budgeting tools because you can only spend the money you have preloaded. With all these cards, it is worth checking whether a Mastercard or Visa is more widely accepted at your destination. For most trips it shouldn’t make a difference, but in less developed countries you might find one works better than the other.

Best currency debit and credit cards to use overseas Type of card Card issuer Fee-free spending limit? Fee-free cash withdrawal limits? Cash withdrawal interest? Cashback? Credit check required?
Starling Debit card Mastercard No None No No No, unless you request an overdraft
Monzo Debit card Mastercard No £200 every 30 days, then 3% No No No, unless you request an overdraft
Barclays Platinum cashback plus* Credit card Visa No** None* No* 0.25%* Yes
Tandem Credit card Mastercard No None Yes 0.50% Yes
Halifax Clarity Credit card Mastercard No None Yes No Yes
Santander Zero Credit card Mastercard No None Yes No Yes
Curve (free version)*** Smart card Mastercard £500 a month, then 2% £200 a month, then higher of 2% or £2 None If using underlying cashback card No
We Swap**** Prepaid Mastercard No None if over £200 withdrawn None No No

Notes: *Not available to existing Barclaycard customers. **Promotion until 31 August 2023 and then 2.99%. ***On weekends and bank holidays, Curve uses the exchange rate from the last working day that markets were open and adds 0.5% (Dollar and Euro) or 1.5% (all other currencies) . ****We Swap charges a 1% fee if you convert currency seven days in advance, 1.3% for three days inadvance and 2% for an instant swap. Source: usnewsrank.com, 8 April 2019


Always pay in the local currency

2 Always pay in the local currency

Some shops and restaurants will offer you the choice of paying in Sterling or the local currency. Though it can be tempting to pick pounds – you’ll know exactly what something has cost, for example – you should avoid this option. This is because you’ll get an exchange rate set by the foreign bank, which won’t be as good as using your newly acquired fee-free card from our list on page 46.

Take some cash with you for tipping and shopping at markets

3 Choose the best way to get cash

Even if you try to make most payments by card, it is sensible to take some coins and notes with you for emergencies or to cover your first day or two. The best exchange rates for cash will be through taking money out of an ATM with one of those specialist cards. You will get the same rate as when making a card purchase.

However, local ATM machines might charge you a fee, and with most of the credit cards featured on page 46, you will also be charged interest on your withdrawal. You can minimise this if you pay off the balance as soon as you can or even make a payment to your card in advance of your trip. As we show in the table, a couple of cards also have limits on how much cash you can take out each month fee-free.

The most expensive place to change your currency is at the airport once you are airside. The mark-up is huge. If you have left it too late and the airport is your only option, then you can order online for collection at most of these bureaux de change to get a slightly better rate, with four hours’ notice.

Elsewhere, don’t get fooled by signs advertising 0% commission. They will still take a cut – it is just hidden in the exchange rate. And preferential rates offered by banks to their customers are rarely worth it. Take NatWest, for example. Exchanging £100 to US dollars at the time of writing would get you $127.01. Those with access to a premium account would only get 67 cents more. But heading to Debenhams instead would net you $130.80.

So it really does pay to shop around. You can use the comparison site Travelmoneymax.com to find the best places near you to collect your foreign currency or to get it delivered.


Hedge your bets

4 Hedge your bets

With currency exchange rates constantly fluctuating, it is often difficult to predict how much a holiday will actually cost you.

If you want to guarantee the rate you’ll pay, you could get your currency well ahead of travel – either in cash or on a prepaid card. Or closer to departure some bureaux de change, including Travelex, allow you to order and lock in a rate seven to 14 days before your trip.

Of course, you will run the risk of missing out on better rates later on. So if it is a concern it might be wise to hedge your bets and get some now, and then use a specialist card while you’re away. That way, you minimise the risk of a big change in the rate.


  • Household finances
  • Holidays

Free Tag

  • holidays
  • travel