Cheap Travel Money: Best Ways to Spend Abroad

Using the wrong travel money can cost you 3-5% on every transaction. Over a two-week holiday, that adds up fast. Here’s how to get the best exchange rates and spend abroad for less.

The Hidden Cost of Travel Money

Most people don’t realize how much they lose on exchange rates and fees:

The difference between the worst and best option can be £50-£80 on a £1,000 spend.

Travel Credit Cards: Best for Spending

A good travel credit card charges no foreign transaction fees and gives you a competitive exchange rate. Some also offer cashback or points on foreign spending.

Best Travel Credit Cards (UK)

Best Travel Credit Cards (US)

Best Travel Credit Cards (Canada)

Travel Debit Cards: Best for ATMs

Travel debit cards give you access to ATMs abroad without (or with minimal) fees. They’re essential for getting cash and as a backup.

Best Travel Debit Cards (UK)

Best Travel Debit Cards (US)

Best Travel Debit Cards (Canada)

Pre-Paid Cards: Good for Budgeting

Pre-paid cards let you load a fixed amount of foreign currency before you travel, locking in your exchange rate.

Best Pre-Paid Cards

Pros and Cons of Pre-Paid Cards

Pros:

• Lock in exchange rates before travel
• Budget control — can’t spend more than loaded
• Good backup if main card is lost/stolen
• Some offer free ATM withdrawals

Cons:

• May charge load fees
• Exchange rates may not be as competitive as travel cards
• Not accepted everywhere (some car rental agencies, hotels)
• Loading can take 1-3 business days
• Some charge inactivity fees

Cash Exchange: When You Need It

Cash is still needed for small vendors, tipping, and countries with low card acceptance.

Best Ways to Get Foreign Cash

Worst Ways to Get Foreign Cash

How Exchange Rates Work

Understanding exchange rates helps you spot a good deal:

The Three Rates

1. Interbank rate (also called mid-market rate) — the “real” rate banks use to trade currency with each other. This is the benchmark.
2. Retail rate — what you get when you exchange money. Always worse than the interbank rate.
3. Card network rate — Visa, Mastercard, and Amex each set their own rates, usually very close to the interbank rate.

What to Look For

• Cards that use the Visa or Mastercard rate are usually competitive
• Cards that use the “interbank” or “mid-market” rate are best
• Avoid cards that add a markup to the exchange rate
• Always compare the rate you’re offered against the interbank rate (xe.com shows this in real time)

Top Tips: Always Pay in Local Currency

When a foreign terminal asks you to pay in your home currency (known as Dynamic Currency Conversion or DCC), always choose the local currency.

Example: You’re in Spain and buy dinner for 50 euros.

That’s a £2 loss on a single meal. Over a week’s holiday, this adds up to £20-£40 lost to DCC.

Why Terminals Offer DCC

The terminal operator makes money from the markup. They profit when you choose to pay in your home currency. Always say no.

Additional Travel Money Tips

Before You Travel

1. Get a travel credit card with no foreign transaction fees
2. Get a travel debit card for ATM withdrawals
3. Notify your bank that you’re travelling (or they may block your card)
4. Check your daily withdrawal limit and request an increase if needed
5. Load some local currency on a pre-paid card as backup
6. Get a small amount of cash before departure for immediate expenses
7. Save your bank’s emergency number in your phone

While Abroad

1. Always pay in local currency — decline DCC every time
2. Use ATMs from major banks — avoid independent ATMs in tourist areas
3. Withdraw larger amounts less frequently — reduces per-transaction fees
4. Keep receipts — check your statements when you return
5. Keep a backup card separate from your main wallet
6. Use contactless where possible — better rates than chip and PIN in some cases

Common Travel Money Mistakes

Travel Money Checklist

Before your next trip, make sure you have:

• A travel credit card with no foreign transaction fees
• A travel debit card with free ATM withdrawals
• A small amount of local cash (order in advance)
• Your bank’s emergency contact number saved
• Your cards’ daily limits checked
• A backup card kept separately
• The interbank rate bookmarked on your phone

The Bottom Line

The cheapest way to spend abroad is a combination of:

1. Travel credit card for most purchases (0% foreign transaction fee)
2. Travel debit card for ATM withdrawals (free or low-fee)
3. A small amount of cash bought in advance at the best rate

Avoid airport exchanges, regular debit cards, and DCC at all costs. The savings on a typical two-week holiday can be £50-£100 or more.