Don’t let the crisis ruin your vacation: our travel money guide will put extra cash in your pocket

As millions of us head out on summer vacation in the coming weeks, it would be completely understandable if the cost of living pressure lingers on the trip like a nagging fear in the back of your mind.

But never fear, there are ways to make the most of your spending money while on vacation. And this year, these tips and tricks will be more crucial than ever due to the cost of everything from food to rocket fuel here and abroad. Also, the pound is worth less in some regions like the United States, due to the fall in value of the pound sterling.

A few tweaks to how you spend your vacation can save you hundreds of dollars – and keep your summer vacation affordable.

Then follow our practical guide…

The pound has weakened considerably against a range of currencies over the past few months, but remained stable against others. For example, a vacation to the US will be more expensive this year than in 2021 because the pound is down 13% against the dollar – so £100 will get you $120 now instead of $138 last summer.

The exchange rate against the euro is broadly similar to last year. However, thanks to falls in the Turkish currency, £100 will buy you 2,014 Turkish liras, up from 1,205 last year.

When spending abroad, you have four main options: debit card, credit card, cash or prepaid currency card. Each has its own advantages and disadvantages.

Let’s go through each in turn:


Spending on your regular debit card can cost you dearly. Transaction fees of up to 3% will often be charged if you pay in a currency other than British Pounds. You may also be charged additional fees for using ATMs, which will either be a percentage of the amount you withdraw or a flat fee. A typical debit card charges £11.88 to withdraw £250 in cash abroad, according to financial data firm Moneyfacts.

If you want to stick with a debit card, you’re better off picking one that doesn’t charge a fee – and there are quite a few on the market. Monzo Bank, Starling Bank, Virgin Money and Chase all offer current accounts with a debit card offering free withdrawals and payments abroad.

If you want to use a debit card, it is better to choose one that does not charge fees

You will need to open a checking account to get the debit card. However, don’t switch your primary checking account just to get the best debit card for spending abroad. Just open a second one.

Of course, if you like using the new account and think it offers good value and a better customer experience than your old bank, you can always use the current account switch service at a later date to transfer all your direct debits and standing orders to the new supplier.


Buying foreign currency with cash can be a cost-effective way to spend, provided you plan ahead. Expect last-minute buying currency at the airport, and you’ll be stung by high fees and exorbitant conversion rates.

Be sure to shop ahead to find the best deal. The three factors you need to consider are fees, conversion rates, and delivery costs, unless you’re picking up your money in person.

The MoneySavingExpert website has a good travel money comparison tool.

Using cash can be a smart way to budget and track exactly how much you’re spending. Needless to say, it comes with risks as it can be lost or stolen, and you miss out on the consumer protection you would get if you pay by credit card.

Using cash can be a smart way to budget and track exactly how much you're spending

Using cash can be a smart way to budget and track exactly how much you’re spending

When buying foreign currency, be sure to pay with cash or debit card – credit card providers may charge you a fee as they treat foreign currency purchases as cash withdrawals. And don’t be fooled by the money changer’s claims of “0% commission” – you’ll just pay extra via less generous exchange rates instead of upfront fees.

The best deals change all the time. According to MoneySavingExpert on Friday, the highest rates for changing £500 into euros were offered by TravelFX, which would change that sum to €569.25. You will pay a 0.299% and £5 delivery charge for orders under £700. The second best was Tesco at €569.15 for £500. Delivery costs £3.95.


Most credit cards charge fees for spending abroad, usually around the 3% mark. It can quickly add up.

However, there are a few that charge no fees on spending abroad, including the Visa Barclaycard Rewards card and the Halifax Clarity Mastercard.

Be sure to pay off the credit card in full each month, otherwise you will be charged interest that far exceeds the foreign currency savings. Also remember that you will need to pass a credit check to get a new credit card. Cash withdrawals on credit cards are also noted on your credit report. There is a risk here that lenders may take this as a sign that you are low on money in your checking account and therefore use your credit card instead. To be on the safe side, you may want to avoid using a credit card for cash withdrawals abroad – even if your card offers a great rate – if you plan to apply for credit in the future. close.

As with spending by credit card in your country, you have strong consumer protection in the event of a problem with a purchase made with your card abroad. Purchases over £100 are protected by your credit card provider, so you should be able to ask them for a refund if there is a problem with a purchase.


These are payment cards that you top up in foreign currency before you leave and that you use in the same way as a debit card.

The advantage of this option is that they tend to offer good exchange rates. You can also use them to buy currencies well in advance. If you think the value of the British pound is likely to fall between now and your holiday, you can lock in now to keep the current exchange rate.

Locking in this way also provides certainty as to how much you will need to spend.

Options include prepaid travel cards from FairFX, EasyFX, Revolut, and Wise.

Pay attention to card delivery costs and the costs of using cards abroad. Some cards also charge an “inactivity fee” if you don’t use them for a certain period of time. So don’t put yours in a drawer until next year if you still have money on it.

TOP COUNCIL: Rent a car ? You will need a credit card.

Most car rental companies require you to use a credit card and do not accept foreign currency debit or prepaid cards as payment.

This is because they want to be reassured that if something goes wrong, they can recover all costs from you.

With a debit or prepaid card, there is no guarantee that you will have enough funds in your account to pay the bill.

In some cases, gas stations and highway tolls may have similar limitations.

TOP COUNCIL: Pay in local currency, not sterling.

When making a payment or withdrawing money abroad, you are often asked if you want to pay in pounds sterling or the local currency. Always choose the local currency.

If you opt to pay in sterling then you are liable for that bank or retailer’s conversion rate – which is likely to be much stricter than the rate charged by your own bank.

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