What is the best way to spend abroad?

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Spending money overseas can end up costing you a fortune in fees and charges. Save your pennies by finding out what your options are before you travel with our guide.

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Going on holiday is great, but how can you get the best exchange rate when it comes to foreign currency? Getting a good deal is far from straightforward as you’re hit with inflated airport rates and charges for using your bank card abroad.

But if you know what you’re doing, you can slash the cost of foreign currency and make sure you’re getting the best possible deal on your holiday spending. Here’s what you need to know:

What are the options for spending while abroad on holiday?

  • CashTake foreign currency but make sure to budget correctly, or you will be left with no money by the end of your trip. Ensure you find the best deal before leaving to avoid buying currency at airport exchanges where the charges are high, and rates are poor.

  • Credit card or debit card: Take your credit or debit card abroad, but watch out for foreign usage charges and your cards getting blocked by your provider. Some banks charge a daily fee that can soon stack up.

  • Prepaid card: These cards can be loaded with cash which you are then allowed to spend in shops or withdraw from ATMs. They only let you spend the money you have put on the card, so there’s no risk of getting into debt.

  • Traveller’s cheques: These can be converted into foreign currency in specific locations abroad. You will need to sign and provide an ID to do this. Traveller’s cheques are becoming rarer, making it increasingly hard to find someone who will exchange them for cash.

Take cash abroad

Cash is the easiest way to start spending when you get to your destination.


  • It can be used anywhere

  • It is easy to manage

  • There are no foreign usage fees


  • It’s expensive to exchange abroad

  • It can be lost or stolen

  • High-value notes can be refused

Find out how to get the best deal on travel money here

Use a debit card

Most providers will charge you for every transaction you make overseas, but you can find credit or debit cards that will cut the cost of your spending abroad.


  • It includes chip and pin protection

  • It’s easy to cancel if stolen

  • It can be free to use abroad


  • Overseas use can be charged 

  • You can accidentally become overdrawn

  • The card can get blocked by your provider

Compare debit cards here

Use a credit card


* Card transactions only


  • It’s expensive to withdraw cash

  • You can go over your credit limit

  • Your provider can block the card

Find travel credit cards here

How much does it cost to use your bank cards abroad?

The cost of using bank cards overseas depends on your card type and the bank’s terms and conditions.

This table shows some of the typical fees you could face when using a debit card or credit card overseas:

Updated 20 April 2023
CostsDebit CardCredit Card
Card transaction fee0% - 2.99%0% - 2.99%
Cash withdrawal fee0% - 2.75%0% - 5%
Cash withdrawal interestn/a6.5% - 69.9%

Debit card costs

The fees might seem small in the example above, but they can soon mount.

For example, the table below shows the costs you could incur with an exchange rate of £0.73=€1, a card transaction fee of 2.99% and a cash withdrawal fee of 2.75%.

Debit cardConversion (€250)ChargeOverall cost
Card transaction fee (2.99%)£182.50£5.46£187.96
Cash withdrawal fee (2.75%)£182.50£5.02£187.52

This example shows that just two transactions abroad can cost you as much as £10.48 extra unless you shop around and find a debit card which offers lower or non-existent charges for usage abroad.

Credit card costs

This example shows an exchange rate of £0.73=€1, a card transaction fee of 2.99% and a cash withdrawal fee of 5%.

Credit cardConversion (€250)ChargeOverall cost
Card transaction fee (2.99%)£182.50£5.46£187.96
Cash withdrawal fee(5%)£182.50£9.13£191.63

In this example, the two transactions can cost you £14.59, but you can find a credit card that does not charge for card transactions abroad, saving you the £5.46 cost above. If you use your credit card for spending and avoid cash withdrawals, you could eliminate these costs altogether.

Daily interest on a credit card

On top of the cash withdrawal fee, you will also need to pay interest on the cash you withdraw using your credit card.

This table shows how much you will be charged over 10, 20 and 30 days if you withdraw €250 (£182.50) abroad:

Cost (€250)10 days20 days30 days
Interest charge£2.78£5.57£8.35

Avoid using a credit card abroad if you plan on making cash withdrawals due to the excessive charges that come with them.

Use a prepaid card

You can use a prepaid card in a similar way to a credit card, except you need to top up the account with funds before you can use them, rather than spending money and paying it off later.

There are two types of prepaid cards:

  • Standard prepaid cards are designed to be used in the UK, but you can also use them abroad for cash withdrawals and card transactions. You are charged at the exchange rate each time you use these cards abroad.

  • Travel prepaid cards, or currency cards, are loaded with a foreign currency instead of sterling, which means you are charged a single exchange rate at the point of topping up the card, rather than every time you use the card.


The advantages of prepaid cards are as follows:

  • They can be used worldwide

  • They can be cheap to use abroad

  • You can budget more easily by only adding what you want to spend


The disadvantages include:

  • There are sometimes charges for loading the card

  • You can only spend what is on the card

  • There may be application fees

Compare prepaid cards to use abroad here

How much do prepaid cards cost to use abroad?

Some prepaid cards can come with several potential fees:

Updated 20 April 2023
CostsStandard prepaid cardTravel prepaid card
Card fee£0 - £15£0 - £50
Load fees0% - 5%0% - 2.85%
Card transaction fee0% - 5.75%0% - 5.75%
Cash withdrawal fee0% - 5.75%0% - 5.75%

When you use a cash machine with a prepaid card, the provider may charge you further fees and limit your withdrawal amount.

For example, a €250 cash withdrawal and a €250 card transaction on a prepaid card that charges 5.75% for both transactions will result in a £10.49 charge for each*.

* Based on an exchange rate of £0.73=€1

How much does it cost to load a prepaid card?

Use traveller’s cheques

While traveller’s cheques aren’t nearly as common as they once were, you can still get them from the post office or a bank. A traveller’s cheque works by converting sterling into a foreign currency and can be cashed when you’re abroad.

When you buy traveller’s cheques, be careful to avoid any unnecessary charges. For example, if you purchase your traveller’s cheques using a credit card, you will be charged both by your credit card provider for a cash withdrawal and by the traveller’s cheque provider too.

There is usually no charge for using your debit card to pay for a traveller’s cheque but double-check before completing your order.


  • It’s a secure way to take money abroad

  • They’re easy to cancel if lost or stolen

  • A replacement is usually sent within 24 hours


  • They cannot be exchanged everywhere

  • There’s no access to emergency cash if they’re lost or stolen

  • If they’re not signed, they can be used if stolen

When you get them, you must sign your traveller’s cheques or risk someone fraudulently signing and using them.

Traveller’s cheques are provided by many travel money companies in association with American Express. This means that you will need to find an American Express foreign exchange kiosk abroad to cash in your traveller’s cheques or see if your hotels will cash them in for you.

Use the American Express Travellers Cheques website to search for kiosk locations.

Spending abroad can be costly, so make sure you compare the market for the best exchange rates available on your travel money before jetting off.

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