Taking Travel Money on Holiday: What are the Best Ways to Take Money Abroad?

Travelers going to another country can take cash, travelers cheques, prepaid cards, or simply use their credit or debit cards. So which of these is best?

Taking Cash on Vacation
Taking local currency is the simplest method, although not necessarily the safest. However, for those who want to do this, it is important to make sure that one does not pay too much when converting to the other currency. It is worth checking different outlets, as some charge commission and some do not, while they may offer different rates of exchange. In general, the traveler will get better rates by changing money in advance than by doing it at the airport or ferry terminal, which is likely to offer far less competitive rates of exchange. In the UK, both the Post Office and Marks & Spencer charge no commission on foreign currency transactions. Often the traveler's bank will charge a commission free, so it is worth checking. Several organizations allow the traveler to order currency on-line, and this may be the easiest option for many busy people.

Travelers Cheques
These are a traditional and very safe way of taking money overseas, since if they are lost or stolen all the money is refunded. However, they can work out expensive, since one pays commission to obtain them, and often the traveler gets a worse rate of exchange when using them overseas. For this reason they are becoming less popular, but are still sensible to use in conjunction with other travel money.

Credit and Debit Cards
Using a credit card abroad is very convenient. Most companies charge a fee every time the card is used in another country. However, this may well be offset by the fact that a very good rate of exchange may be used. Some people, including the author, have found that this is in fact an economical way of doing things. However, credit card withdrawal fees when on holiday can become expensive. Those who intend to use their credit and/or debit cards when on vacation should always tell the credit card company in advance. Recently, to combat fraud, some card companies have begun stopping use of the card if a pattern of purchase appears "unusual." They will then contact the owner, but if he or she is abroad this could be difficult. So it is sensible to tell them in advance, and take more than one card, or another type of travel money, in case one has any problems. One bonus of using credit cards abroad is that the user is covered by their insurance for expensive purchases.

Prepaid Cards
These cards can be an ideal way of taking money overseas. One pays a fee when the card is bought, and then top it up with cash. It should be hassle-free. However, it is worth checking if the card can easily be topped up when overseas.

The most sensible option is to use a variety of types of money - perhaps some travelers cheques, a small amount of cash, and a credit card or two for emergencies or large purchases. This type of combination offers both safety and convenience.