How to get the best deal when spending money abroad

As the summer holidays get under way, it’s worth looking for ways to avoid the rip-off on foreign-exchange rates that banks, credit-card companies and bureaux de change impose on unwary travellers. One of the best ways to do this is to use a pre-paid currency card or travel-friendly credit/debit card for your spending. This way, you get to avoid the rip-off foreign-exchange rates and reduce the need to carry wads of cash in your wallet.

With credit or debit cards, the key is to look for one which doesn’t charge for transactions and cash withdrawals abroad and doesn’t add any commission onto the exchange rate you get charged. These tend to offer the best deal as they are cheaper than pre-paidtravel cards, though with credit cards make sure you pay off the balance quickly. There are only a few commission-free cards and the general-purpose one is the Halifax Clarity credit card.

With pre-paid travel cards, you can choose the type of currency you want loaded on the card (pounds, euros or dollars) and transfer more money across on the internet while you’re away. Pre-paid card providers make money by charging a commission when you load money onto the card, and sometimes through spending or withdrawal fees. Be aware that they’re often not accepted for car hire or petrol purchases, so you should carry another card or take plenty of cash for these situations.

Product Details Notes
Halifax Clarity
(credit card)
No currency commission for non-sterling transactions or withdrawing cash There’s no fee for cash withdrawals, but you do not get an interest-free period on these – so pay off the balance as soon as possible.
(pre-paid card)
Commission on loading (€1.4103 relative to exchange
rate of €1.4235)*
Available in EUR, USD or GBP base currency. €1.50/$2/£1 ATM fee on international withdrawals. 1.4% fee when spending in another currency. £9.95 to buy card (free when bought through some affiliates).
Caxton FX
(pre-paid card)
Commission on loading (€1.3924 relative to exchange
rate of €1.4235)*
Available in 15 currencies. 2.49% exchange-rate mark-up when spending in another currency.
*GBP/EUR exchange rate on 03/08/2015