Planning a trip abroad? Find out which are the cheapest travel money providers and other money-saving tips to keep your holiday spending down.
Making sure you buy your holiday money from a decent provider should be top of any holiday to-do list.
To make things easier for you, we’ve tracked rates from 40 travel money providers over the past 12 months for buying £500-worth of currency to come up with a top 10 that provide consistently good rates.
But once you’re on holiday, making sure you have the right selection of cards in your wallet is crucial to avoid paying unwanted fees on every transaction. Below we highlight the best credit card and prepaid card options.
Dynamic currency conversion (DCC) transactions are commonplace in some countries in Europe and the US but can be as costly to make as using a debit card with high fees. We cover some key information about this type of transaction and what you can do if you’ve unknowingly made one abroad.
Here, Which? arms you with five top tips to make the most of your travel money, the best credit and prepaid cards to use abroad and how DCC works.
1. Get the best deal on your currency exchange
During the past year the pound has strengthened against the euro and weakened against the dollar. You can get approximately 12% more in euros today (around €77 on £500-worth) than you would have got in September last year but around 5% less in dollars.
The table below shows the top 10 travel money providers offering consistently best rates during the past 12 months. The rates shown are based on exchange rates gathered at around the middle of each month and factor in delivery costs.
|Best travel money providers: consistently best rates for £500|
|Companies ranked by euro rate||Euros for £500||Companies ranked by dollar rate||US dollars for £500|
|Bestforeignexchange.com3||€658||Rational FX4, 5||$762|
|Rational FX4, 5||€657||Moneycorp1, 2||$762|
|Caxton FX4, 5||€656||Caxton FX4, 5||$762|
|Asda Money1, 2||€655||Thomas Exchange Global3||$761|
|Thomas Cook1, 4||€655||Sainsbury’s Bank1, 2||$760|
|Sainsbury’s Bank1, 2||€655||Asda Money1, 2||$760|
|Thomas Exchange Global3||€655||Thomas Cook1, 4||$759|
|Tesco Bank1, 2||€654||Tesco Bank1, 2||$759|
|Travelex1, 2||€654||Travelex1, 2||$759|
Rates gathered monthly over a 12-month period across 40 travel money providers
1 In-store collection available
2 Free delivery on £500-worth or more
3 £4.90 additional insurance charge on amounts up to £2,500. Only available for in-store pick-up in central London
4 Free delivery on amounts above £500
5 No in-store collection
Find out more: Travel money – tips for finding the best deal on foreign currency
2. If you’re buying currency from the airport, preorder
We’ve all done it – left things a little late and decided to buy holiday money from the airport at a less than competitive rate. However, this needn’t be a disaster as long as you preorder your money for collection.
Moneycorp, Travelex and ICE all allow preorders of currency at their more competitive online rates. With Moneycorp you need to allow a day for preordering, but for Travelex and ICE you can preorder up to a minimum of three hours before collection.
As shown above, we’ve found both Moneycorp and Travelex offer consistently good travel money rates for euros and dollars.
Find out more: Currency exchange reviews – dozens of providers rated
3. Spend on a credit card designed for overseas use
If you don’t feel secure carrying foreign currency, you may prefer to pay with plastic while on holiday.
Although some credit cards charge hefty fees on purchases made abroad, there are plenty that are designed specifically for overseas use and won’t charge any foreign loading fees.
You’ll also get extra protection against the threat of buying faulty items through section 75 of the Consumer Credit Act on all purchases between £100 and £30,000, or through chargeback on other purchases.
Make sure you repay the balance in full by the end of the month if you want to avoid paying interest on your purchases.
The Which? Money Compare credit card tables let you search cards from providers large and small to choose a great deal based on quality of service as well as cost and benefits.
Which? Money Compare Table – Credit cards for overseas spending – our tables are updated daily
4. Consider a prepaid card
Some of the best prepaid cards for overseas use now offer a compelling alternative to the credit cards mentioned above.
The free Revolut mobile phone app and prepaid card is one of the best alternatives on the market, offering interbank exchange rates, which are as competitive as the rates offered by MasterCard and Visa.
Its multi-currency prepaid card and app allow you to load money via the app on to the prepaid card for use abroad. You can also transfer currency between Revolut customers free of charge and it offers international transfers to bank accounts for a range of currencies.
Other prepaid cards worth considering include euro/dollar and multi-currency prepaid cards from ACE FX, Caxton FX and Fair Fx, which we’ve found consistently offer good exchange rates and cards with low fees.
If you are interested in a prepaid card, our prepaid card tables compare dozens of cards, highlighting what fees you will be expected to pay for each of them.
Find out more: Prepaid card tables – find a great deal
5. Avoid dynamic currency conversion
If you’re offered the choice of paying in sterling while overseas rather than the local currency, this type of transaction is known as dynamic currency conversion (DCC).
The exchange rate and any commission charges for a DCC transaction is set by the retailer’s bank. This differs from transactions where you pay in the local currency, which rely on the exchange rate offered by your card’s network provider, plus any additional fees set by your bank.
Which? has found that these transactions can be as pricey in charges as using an expensive debit or credit card with high overseas fees.
There are strict rules that govern how DCC is offered to customers to ensure they are given a choice in payment options and transparency of charges. The rules state that the merchants’ transaction slips must show:
- the original amount in the retailer’s currency
- the amount in the cardholder’s home currency
- the exchange rate and its source
- any fees, commission or charges, whether applied within the exchange rate or separately for the transaction
- a declaration the cardholder was given a choice.
If the above rules aren’t followed you can complain to your bank and request a chargeback for the conversion fee that was applied to the transaction.
Find out more: Dynamic currency conversion
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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.