Money Guide

What are the alternatives to travellers’ cheques?

Security and convenience are the most important factors for your holiday spending money.

Travellers’ cheques have their place in the market, but there are more and more alternatives.

For some people travellers’ cheques are a preference for safety, but there are alternatives.

Using plastic may cost a little bit more for transactions and cash withdrawals, but you should be able to use them in most places.

Credit and debit cards

Visa and MasterCard cards can be used in millions of places worldwide to pay for everything on your travels. They can be low-cost, offer reward points, carry insurance if lost or stolen, and can also be used for cash advances.

However, charges for using credit cards abroad can be high, with ”loading fees” of 2.75% when making transactions, and additional charges for cash withdrawals. Don’t forget local ATM providers might also add on a charge of their own.

Debit cards can also be used in millions of retailers and ATM machines worldwide, usually costing less than credit cards for cash withdrawals while transactions are charged at a flat rate of £1-£2 each, depending on the card provider.

There are some credit cards that don’t charge commission for transactions or cash withdrawals (ATM providers might still charge), although they will charge interest so make sure you pay off your balance on your return.

The Post Office Credit Card (www.postoffice.co.uk) offers 0% commission on overseas purchases only.

Some of the best credit cards for using abroad however, include:

• The Santander Zero Card (www.santander.co.uk), which will not charge for either transactions or cash withdrawals overseas.
• There is now also the new Halifax fee-free credit card which will not charge you a foreign exchange fee on any transactions you make on holiday or a cash withdrawal fee when you use a cash machine abroad.

For more information, check out our guide to using your credit cards abroad.

Prepaid or ‘Money’ cards

Prepaid travel cards (or ‘Money cards’) are fast becoming an electronic alternative to travellers’ cheques. They can be pre-loaded with a set amount of money before you travel then used anywhere Visa is accepted.

Money Cards typically have a 1%-1.5% commission for loading money onto them. As long as transactions are in the currency loaded onto the card (e.g. Euros, dollars or sterling), there is usually no transaction charge. There is a low rate charge for cash withdrawals, on top of ATM provider charges.

Because Money Cards are separate to your bank account, if the card is lost or stolen, there’s less danger of anyone else draining your bank account before you can cancel the card.

Money Cards are especially useful for Gap Year students travelling alone for the first time. (Please see our guide on student travel tips)

Because they have a set amount of money loaded on them, users can’t overspend their budget - although they can easily be topped up by phone, online or in participating banks and post offices.

To find out more information on prepaid cards, check out our guide on prepaid cards.

Currency

When travelling always take some local currency to cover costs of taxis, public transport or tips.

Local currency can easily be bought at local banks or bureaux de change (Although commissions are often expensive and exchange rates can fluctuate).

But the best option is to get what you need and pay 0% commission at your local post office before you travel, but make sure the exchange rate is low too.