ne of the most important things to think about when travelling is money. I know that there are many people who travel on a shoe string budget whilst others use it as an opportunity to really splurge… However no matter how you want to spend your money – you need a way to keep it secure but accessible! This article covers some of the most popular forms of payment aboard… Although as technology advances these methods are getting more plentiful with the addition of methods such as PayPal cards and apple pay so this list is by no means exhaustive.
The credit card is probably the most secure way to pay for things both at home and abroad. As long as you manage them well and make sure you have the ability to pay them off in a timely manner they are certainly your best option when going on holiday. As technology advances credit cards are accepted all over the world, in so many different locations (no matter how remote)… However remember that Master Card and Visa are accepted in most places, while American Express can be a little hit and miss as to where they are accepted.
When it comes to security, if your card is stolen while you are abroad or fraudulent transactions are made on the account it is much easier for you to get your money back with a credit card than it is with any other payment method. However make sure that you have got a backup payment method in case your card does go missing… Although I do know that there are some suppliers who can get a replacement card to you in many countries, but this is not always the case and is not very useful for holidays where you will be moving around a lot.
There are also some instances when you travel where a credit card will be essential. For example some hotels will require a credit card (and cash or debit card will not be accepted) as a deposit on the room for things such as the mini bar and most car rental companies will not rent out a car to you without a credit card to put a deposit on. If you have poor credit it is worth still trying to get a credit card with a low limit just for these occasions. If this is the case you can keep it in good credit by purchasing something you would buy anyway (such as weekly shopping) on that card and paying it off as soon as you get home. This way you will incur no charges and it will keep your card active as well as increasing your good credit.
These work in much the same way as credit cards so I won’t go in to the details of how to use them, however will point out that they are usually not covered by the level of protection that credit cards are, and if stolen it can be much more difficult to get your money back. Also it is uncommon to be able to use them as a deposit in places such as hotels (although I have done in the past) and certainly car rental companies.
A suggestion I would make if you are often travelling is to set up 2 bank accounts and get yourself a bank with a good online banking service. The reason for this is that before you travel divide your money equally between the accounts and always keep the 2 debit cards in different places (such as one in your wallet and one in a security pouch or locked in luggage or a safe). This way in the event of a robbery it is less likely that they will take both. With this method if they manage to clear an account they can only get half your money. However if there are any problems cancelling that card find somewhere with WiFi or a computer and move all your money on the account which you still have a card for – this may be quicker than cancelling the card plus you still have access to all your money while your new card will be waiting for you at home for your return.
This is a tried and tested but now very outdated way of bringing money on holiday – however I have never tried it and to be honest I know that less and less people seem to be using… In fact I don’t know anyone from my generation who uses traveler cheques… With its steady decline since the 90s I wouldn’t be surprised if just like the normal cheque they are soon phased out. There are now so many alternatives available I wouldn’t use one – I cannot think of a single reason why you would!
You used to be able to use them like currency but places don’t tend to take them as payment anymore and if anything they need to be taken to places like banks to be cashed. They were a good idea for closed currencies in particular however with the availability of cash machines and card terminals for payment around the world now there is little room for them in modern society!
Pre paid cards
These work the same as debit cards and as such should be useable anywhere you can use a card (usually you can get a Master Card or Visa one depending on the supplier). This is about as secure as using a debit card with the main plus side being that you cannot go over-drawn with it so if someone steals it and can remove all your money they cannot put you in to extra debt, and they are usually covered by fairly good insurance.
One other good thing is that they often come as being loaded with Dollars, Euros or Pounds, which means you can see which currency has the best exchange rate in the country you are visiting and load it with that currency.
I have however only used this method and would never go back to it. I had a Master Card one from Thomas Cook when I went to India, however when we got there it did not work in any card machine terminals except for a single shop we went to on one of our last days and wouldn’t work in any cash machines other than one we found for HSBC. This meant that we were left with no money for the majority of our trip and is one of the main contributors for why I hated my experience in India – nothing is worse than being on holiday and having to worry about your finances!
The most frustrating thing about it was that we found a Thomas Cook office in one of the malls in Chennai and I breathed a huge sigh of relief when I saw that they sold currency (including rupees) and that they took Visa, American Express and yes even Master Card… I went to the counter to pay and my heart sunk when I was told that they do not accept those pre-paid cards… even though it was one of their own! To make matters even worse though when we came home it was of course still loaded with dollars and the buyback rate for changing it back to pounds was absolutely terrible – but not quite as bad as using it for my shopping for the following weeks.
All in all this card is what really ruined our trip and cost us a lot in lost money.
This is my preferred payment method both at home and abroad… Personally I can keep a better eye on my spending this way. Plus you know its accepted just about everywhere, whether you’re buying a gucci bag or a coconut at the side of the road. A few exceptions as mentioned above include some petrol stations (such as remote ones in Iceland), car rental or deposits in most hotels.
I actually enjoy using the local currency while abroad as it allows you to immerse yourself that little bit more in the culture… Plus when you get home if you collect holiday mementos or do a scrap book, low value notes and coins can be great emotive memory joggers at a later date.
Think carefully however about where you buy your currency from. If you are taking a fairly substantial amount of currency you can save yourself tens of pounds by getting the best deal… Might not sound a lot but think of it as an extra meal whilst away! The best way to do this is usually to order online for delivery (this is secure) or pick up at branch or port (with this often being the most expensive option). I recommend using a comparison site such as Money Saving Expert as you can be assured at least that it is a reputable company. However whatever you do buy your currency before you go… Sometimes you can get good deals abroad but this I have found to be rare (a good option for top ups abroad are often hotels who can sometimes change cash but more often can sell you local currency as a card transaction)… They want to keep you happy and have you spending so their rates are usually good. I’ve place not to buy currency if you can avoid it is on arrival at the airport where they have shocking rates. Sadly sometimes with closed currencies such as India this is your only choice but just buy what you will need for a day or 2 before heading to a bank of travel money shop.
The down side of cash is that it is the easiest to go missing so remember a few golden rules:
Never carry all your cash (leave the majority locked in your suitcase or make use of the safe if your room has one), only bringing out what you think you will need
Don’t flash your cash in public
Don’t tell anyone (other than customs officials) how much cash you have
Check import and export of cash allowances for your destination