Money Travelling Tips

Gone are the days when the only way of getting money in a foreign country was to carry traveler’s cheques, cash or a credit card. However, these tried and tested money vehicles still offer a lot of positives when it comes to security and costs.


When changing notes from one currency to another, you will be charged a commission which usually attracts a minimum fee, so changing small amounts of cash can be costly. Banks will generally offer you the best rates and commissions for changing cash.

Cash, although the easiest to use is also the easiest to lose. Be sure that you don’t carry more cash than you are insured for. Your travel insurance will generally cover stolen money. However, when you come to claim from your insurer for stolen cash you will encounter great difficulties because you have to prove how much cash was stolen and this is no simple matter.

In some countries, especially in Africa, the US Dollar is the currency of choice even though it is not the local currency. Thus you will need US Dollars to travel in these countries. Before traveling to a country find out which currencies are accepted as cash.

Travelers’ Cheques

Travelers’ cheques offer good security. As long as you have a record of your issued cheque numbers, you can always cancel stolen cheques and get them reissued. However, they are expensive instruments, as travellers’ cheques will normally incur a fee when you purchase them, as well as a rate of exchange fee when you cash them into local currency. Exchange rates fluctuate constantly so it is a good idea to keep an eye on the rates and change your currency when the rate favours you.

Credit Cards

Easy, convenient and widely accepted, credit cards are the most popular way of paying your expenses when you travel. However, charges and fees can mount up if you do not pay your outstanding balance in full each month.

Be aware that when making purchases on your credit card in a foreign currency, the retailer may offer you a service called dynamic currency conversion. This will convert the purchase into the home currency of your credit card and charge you accordingly. Although this provides you with a knowledge of how much you are spending, the conversion rates associated with this option are usually far worse than those provided by your credit card company.

Try not to draw cash from your credit card when on holiday. This is the most expensive money you can buy, as the credit card company may give you an exchange rate that is lower than the bank, may charge you a fee for withdrawing the cash and may also charge you immediate interest charges for the cash that you have withdrawn.

There is great competition in the credit card market and costs are being amended all the time. It pays to investigate fees and charges applicable to credit cards available to you.

Prepaid cards

Prepaid cards are becoming popular. Loading a card with cash and then spending it on holiday is similar to using cash, with the added protection that the card can be replaced if lost or stolen. As prepaid cards are fairly new, they still attract many fees, but as competition increases the cards are beginning to offer greater incentives to use them.

Prepaid cards can also be topped up. However, you need to investigate how this top up can take place. It is of no use to a person on holiday if their card can only be topped up in the bank branch where they purchased it. Generally top ups can be performed on the internet, via a phone or face to face.


Date posted: 22nd June, 2011

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