Holiday Money: Mix and match is the flexible way to pay

Simon Read introduces a three-page report on making the most of your cash abroad

Travelling need no longer mean scrambling with some strange local currency. The plastic card explosion has meant that packing your plastic should get you what you want, wherever in the world you are - well almost.

That's not just limited to credit cards; debit cards, as long as they're backed by Visa or Mastercard, are also now welcome around the globe. Relying on credit or debit cards to see you there and back, however, would be unwise.Transaction charges by foreign banks and financial companies can add considerably to your credit statement, and you are always going to need some local change on arrival to pay for a cup of coffee or a taxi from the airport. It is also still possible that there is nowhere at your destination that accepts plastic. Imagine trying to buy some African art from a village hut on credit, for instance. Trying to use plastic in China, too, can present problems.

So mixing and matching your holiday money is essential and travellers' cheques should have an equally important space in your wallet or handbag. But beware of keeping all your holiday money together - tourists are easy prey for pickpockets and bag-snatchers. Separating your plastic from your cash and travellers' cheques should ensure that you also have a back-up if the worst happens.

The priority when travelling is to ensure you have enough money, or at least access to it. Being broke and alone in a strange country can be an unhappy experience, so back-up cash is important.

Once you've decided on the mix of travellers' cheques, plastic and currency, the task is to find the most economic way of creating it. Buying currency can be expensive and if you choose the wrong source it will cost you more than it needs to. Commission at high-street locations ranges from 1 to 1.5 per cent on travellers' cheques, to between 1.5 and 2 per cent for foreign currency. Most sources have a minimum charge which ranges from between pounds 2.50 to pounds 4, so shopping around should save a few pounds. Most banks and building societies offer reasonable charges, but check out other locations such as the Post Office and travel specialists.

A far more secure way of carrying a lot of money is through travellers' cheques. They are easy to change in tourist areas and may even be accepted as cash in some places, such as in the US. Check what commission you may be charged before your change cheques.

Before ordering travellers' cheques, check the preferred currency of your destination - it will normally be either US dollars or sterling.

It is essential to take precautions with travellers' cheques, because they can be used as cash. So keep a separate record of the serial numbers of all cheques and keep a note of the emergency number of the issuer.

Most high-street financial institutions will be able to supply you with travellers' cheques on demand, although if you want other currencies than sterling or US dollars you will normally have a delay of a few days.

While credit and debit cards are, these days, one of the easiest ways of spending abroad, they are not always the cheapest. The exchange rate on credit card transactions is normally better than you'll get if you exchange cash for foreign currency, because the credit card companies can buy in volume and get better rates. But delays in overseas transactions being applied to your account could mean you loseout, or indeed gain, if the exchange rate has risen or fallen since you used your card.

Using plastic to take out cash through an ATM while abroad is simple. Make sure you know the exchange rate so you don't mistakenly withdraw more than your account can stand - and, of course, your PIN. Cash machine withdrawals abroad attract an additional charge of around 1.5 per cent, and it has been known for the local bank to levy a further charge.

A word of warning: if you go over your credit or debit limit while on holiday, your card will be of no use to you other than as a bookmark.

Sport
Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Voices
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
Sport
world cup 2014
Sport
Popes current and former won't be watching the football together
PROMOTED VIDEO
Sport
News
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
books
News
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
News
business
News
Mick Jagger performing at Glastonbury
people
Sport
Germany's Andre Greipel crosses the finish line to win the sixth stage of the Tour de France cycling race over 194 kilometers (120.5 miles) with start in Arras and finish in Reims, France
tour de franceGerman champion achieves sixth Tour stage win in Reims
Extras
indybest
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
News
people
Arts and Entertainment
Chocolat author Joanne Harris has spoken about the financial struggles most authors face
books
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Business Analyst Consultant (Financial Services)

    £60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

    Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

    £60000 per annum: Harrington Starr: A leading provider in investment managemen...

    AVS, JVS Openlink Endur Developer

    £600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

    Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

    £30000 per annum: Harrington Starr: A global leader in trading platforms and e...

    Day In a Page

    A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

    A History of the First World War in 100 Moments

    Peace without magnanimity - the summit in a railway siding that ended the fighting
    Scottish independence: How the Commonwealth Games could swing the vote

    Scottish independence: How the Commonwealth Games could swing the vote

    In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
    Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

    Hollywood targets Asian audiences

    The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
    Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

    Grindr founder Joel Simkhai: 'I've found love on my dating app'

    Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
    Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

    Is it time to ditch autocorrect?

    Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
    10 best girls' summer dresses

    Frock chick: 10 best girls' summer dresses

    Get them ready for the holidays with these cool and pretty options 
    Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

    Westminster’s dark secret

    Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
    A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

    A History of the First World War in 100 Moments

    Dulce et decorum est: a life cut short for a poet whose work achieved immortality
    Google tells popular music website to censor album cover art in 'sexually explicit content' ban

    Naked censorship?

    The strange case of Google, the music website and the nudity take-down requests