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.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
New Articles
i100... she's just started school
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam