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
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
Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'
- 1 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 2 Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 NHS staff banned from drinking tea or coffee on the job because it looks like they're not working hard enough
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Russell Brand threatened with arrest after filming outside Fox News headquarters
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village