Travel Money Guide: Are you getting ripped off? (2020 edition)

This article discusses the best ways to deal with money when you go abroad.

When it comes to travel money, it seems like every man and his dog is trying to rip you off with dodgy exchange rates, foreign currency transaction charges and unreasonable terms and conditions.

This is not an exhaustive guide, but should help point you in the right direction for travel money for short and long term travelling and trips.

Cash machines, banks, travellers cheques, pre-paid credit cards… You have loads of options.

Most people take their money out at a Bureau de Change (or travel agent) before they leave their home town. Some people do it at the airport before they depart, or on the ferry. The exchange rates on both are poor and you tend to get very little for your money. There are plenty of other options for sorting out your money abroad, as I found last year when I drove from York UK to Rome Italy in my car.

A laid back attitude can save you loads in exchange fees, and don’t worry, if you can’t find an ATM, most places (including every toll road between here and Rome, every petrol station we went to, and every hotel we stayed in) take credit and debit cards, they’re not baffled by chip and pin, and when you’re at the till, facing a helpful attendant, you’ll probably find trying to articulate your petrol pump number more difficult than the actual paying part. That was my experience, anyway.

When I got home, I was pleasantly surprised to find that my bank hadn’t charged me all those crazy fees they scare you with for using your cards abroad, either. I used both my credit and debit card, depending what I felt like at the time. I was working for minimum wage at a supermarket at the time so I wasn’t well off and bank charges were my biggest worry. Banks love to charge you for accessing your money abroad.

Here’s what I found out about your money options when you go abroad:

1. Cash machines.
The absolute easiest thing to do these days is to just put your card in a cash machine when you get abroad and take some money out in the local currency. I take mine out in blocks of about £200 to make sure I’m making the most of currency charges. I’ve found this to be a LOT cheaper than any bureaux de change either here or on the ferry, and it’s more convenient than carrying round all the money for a longer trip. If you’re staying for a month or two, a foreign bank account might be worth opening. You usually need your passport, proof of address, proof of UK address, and sometimes they want a signed reference e.g. from an employer or college at the country you’re staying in. Check with individual banks for details.

2. Travellers Cheques/ Cheques de Voyage
Nobody uses/accepts these any more, and places probably shouldn’t be issuing them nowadays. It’s like the financial equivalent of a gramophone. If you have some, you may still be able to get your bank to change them into real money for you, but we struggled to get this done with some in 2014, and that was 6 years ago.

I was quite shocked to see another travel blogger recommend using these recently because I don’t even know if you can still get them issued, but they’re such a bad investment because they’re just so obsolete that they’re worth avoiding at all costs.

3. Pre-paid credit card
If you’re venturing off alone for the first time, pre-paid credit cards are a great idea, because you can leave your main bank cards etc at home, so if you get pickpocketed or held up at gunpoint, you can feel safe in the knowledge that your usual card is safe in your house. Unless your house gets robbed.

Personally, I would take my usual card with me because one call to the bank gets it cancelled anyway, and these days, there’s rather good protection from the banks in the event of lost and stolen cards, but it’s up to you because confidence is really important when travelling (especially if you have anxiety) and if this makes you feel more confident about venturing abroad, then go for it.

Another good use of a prepaid credit card is to buy one once you arrive in your destination country. Basically, you buy the prepaid credit card like a gift card in some countries (the Vanilla One Visa in the USA is one example) and then you can use it with the same rates as locals do.

This is especially good in America where you can use it everywhere with any “billing address” you choose, meaning you can get Amazon.com to deliver to your motel, and you can pay for petrol (gasoline) at the pump, which is standard in America. It’s actually really hard to travel within the US because instead of chip and pin, their medieval pay at the pump system requires your card’s 5-digit numeric zip code, which you don’t have in the UK.

So, instead, you have to line up, prepay your pump for fuel, then go back out and put the petrol in, and half the time the cashiers don’t know how to do a prepay or don’t want to, and it’s an absolute nuisance if you just wanted to fill the tank and have no idea how much you need to prepay to do that. Getting a prepaid Vanilla One Visa card from any store e.g. Walmart, CVS, Walgreen’s, then typing 12345 as your zip at the petrol pump really solves this issue. No other prepaid debit card in the US works this way (you usually have to register them and use a social security number) though, so be aware before you put $500 on something that never gets to you.

4. The following banks have branches outside the UK: HSBC, Barclays, Royal Bank of Scotland, and Deutsche Bank (obviously, this is a German bank, but they have a few branches in the UK so you could open an account here before you go abroad and would be an excellent choice if moving to Germany for more than a few months as they have branches EVERYWHERE).

Citibank offer a service where you can open a 2nd account in a destination country before you leave the UK if you have a UK account with them (their branches are all in London), and they’re fairly well represented across Europe, so could be a good choice if you are looking to work abroad for a while – especially since you can transfer up to £50,000 instantly between your UK and foreign Citi account, perfect for trips home. All these banks are mentioned because they have branches in several countries across Europe.

Outside of Europe, you are probably looking at Barclay’s or HSBC, although they tend to only have branches in capital cities. HOWEVER accounts tend to be country specific so there is generally a more limited range of things you can do in your own bank abroad, check each bank individually to see which ones would be most useful if you’re going abroad. If you’re spending more than a couple of months abroad, it’s well worth opening a foreign bank account and if it’s with your own bank that you bank with in the UK, you should be able to transfer money between accounts and currencies more easily, and some will even do it for free (although this varies, so check).

Here’s a handy link for a list of banks in every country in Europe (and some countries that are clearly NOT in Europe, such as Azerbaijan; thanks Wikipedia): http://en.wikipedia.org/wiki/List_of_banks_in_Europe

5. Transferwise! New to the scene and taking the money exchange world by such a storm that Paypal are afraid, Transferwise is the quick, easy way to change money between currencies. You have two options: Using Transferwise to do a currency exchange before sending money to someone else, or opening a Transferwise banking account. You can even get foreign bank details and a debit card for your Transferwise account.

However, the huge downside of using a Transferwise debit card (which I hope they fix soon) is that it doesn’t let you pick which currency it pays for things in when you are spending in a third currency. For example, if you hold balances in GBP (pounds) and USD (dollars) and want to pay for something in France in EUR (Euros), if you don’t hold a balance in EUR, the card will pick at random to take the money from your GBP or USD currency.

Let’s say you were saving your USD for a different transaction, you now have to do a GBP to USD currency exchange and pay the currency exchange fee again to restore your USD balance. Very annoying given that exchange rates fluctuate between different currencies at differing rates. Overall, however, Transferwise is a fantastic service, I’ve been using it a while now and I’d give them 9 out of 10.

Those are the travel money options for going abroad (unless you want to take a flock of chickens for bartering instead). What do you do about money when you go abroad? Let me know in the comments!