How much cash should I take abroad?

Now I do know that buying foreign currency when planning your holiday can be tricky. How much cash should I take? Will I be charged for using my debit card? Where can I get the best exchange rate?

It would be advisable not to take too much cash as this opens you up to theft. Make sure you take some smaller denominations in whatever currency it is you are using. Think about when you land and are making your way to your accommodation, you may want to tip the taxi or shuttle bus driver and you can not ask for change!

It is widely known that buying your currency last minute at the airport is the most expensive way as they tend to have the worst exchange rate. Planning ahead and buying your currency before you fly may mean you have more spending money! Try Martin Lawrence’s travel money comparison site (Be aware that some websites may charge you for delivery if your order isn’t above a certain amount, so overall the currency may not be cheaper).

A lot of travellers would take their debit card with them as this is what they use on an everyday basis when they are at home. Most of the time the exchange rate is whatever VISA sets that day and is not usually the best, many banks also charge a small fee for spending abroad which can be around 2.99% of the purchase/cash withdrawal. On top of these some debit cards charge a set fee per transaction, for example £1 every time you buy something. It all adds up!

The credit card also occurs a fee when using abroad, you have the rubbish exchange rate and the currency exchange fee (the 2.99% mentioned before), however most don’t charge the per transaction fee.

The best way to get around all these charges is to take out a Travel Money Card, these are basically top up cards which when you do top up you get the exchange rate at that time, not the time you go and spend, this means you don’t have the currency exchange fee to worry about. Check the charges on these cards as they may charge a set amount for cash withdrawals e.g. $1.50 each withdrawal. (If this is the case, take out cash to last a few days, not just a few notes here and there. These fees do eventually add up).

I personally take all four options with me when I go abroad. Some cash to get me started, for drinks and maybe the first meal. My main source of spending money is from my Travel Money Card. I top this up with quite a bit before I go and make sure I get a good exchange rate. I keep the rest of my spending money in my current account, just in case I don’t spend all of what I thought I would. I earn interest and it means I won’t have to pay if I need to take it back off the card when I get home. I usually have internet access when I am away so I can top up halfway through my holiday. With the debit and credit cards they don’t tend to be used but I take them as a back up just in case.

24/7 travel insurance covers up to £300* for the loss or theft of your personal money. This means if all your spending money adds up to the equivalent of £1000 you would only get a maximum of £300* back. This reinforces what I mentioned earlier about not having too much cash when you travel. As an example, 24/7 travel insurance for a 3 day trip to Italy would only cost £5.88**.

Please note that you will need to check with your card provider what fees you will be charged.

* Totals quoted are based on a ‘Premier’ Single Trip 24/7 travel insurance policy. You must read the policy wording to ensure you are familiar with your cover, exclusions and excess.

** Premium £5.88 includes Insurance Premium Tax based on an adult aged under 55 taking out a ‘Premier’ Single Trip 24/7 Travel Insurance policy excluding personal possessions cover for 3 days in Europe and purchased within 14 days of departure date. Cover details and prices are correct at time of going to press (16th June 2011) and are subject to change.