11 min Read
13 Jul 2015

Written by Liam

Over 30 years experience in financial services, residential lettings and property sales. Director of a leading national estate agency chain, until leaving in 2008 to pursue other commercial interests. Vast experience in new business development, business change, management development and business strategy.

More about Liam

The best way to take money on holiday

The best way to take money on holidaythe best way to take money on holiday

Here are the various options available to take money on holiday and some help in deciding what is best for you. Around this time of year you may be planning for your annual holiday and, if travelling abroad, how much spending money you will need. Once you have decided on the amount of money to take on holiday, you will also need to decide what is the best way to take money on holiday.


The simplest method of taking money on holiday is just carrying cash in the currency of your destination. However, there are a couple of drawbacks with this option.

  • Security - obviously carrying a large amount of money anywhere creates a security problem, often when abroad we inadvertently advertise the fact we are tourists - checking maps, asking for directions etc. - thus leaving us vulnerable  to theft.
  • Exchange rate - All foreign currency services advertise two exchange rates - buying rate and selling rate, this means that you buy foreign currency at a higher rate than the one offered if you have money left over at the end of your  holiday that you wish to change back.

Obviously, you will always need to take some cash on your holiday to pay for things like taxis and tips, but make sure you take no more than necessary and be mindful of security at all times.

Credit card

One of the safest ways to take money on holiday is a credit card as the security issue is minimal and you don't have to decide in advance how much money you will need. If you do lose your credit card, or have it stolen, then just contact the card provider and they will issue a replacement. There a couple things you need to be aware of before deciding on this method to take money on holiday.

  • Conditions - check the conditions for your particular credit card as there will usually be charges for cash withdrawals and even for just using your card abroad. One thing to note is that most cards charge interest on cash withdrawals even if you repay the balance.
  • Dynamic currency conversion -  this means that suppliers may charge you in sterling rather than the local currency, the rate used for these sterling transactions is invariably uncompetitive so always opt to pay in the local currency.

If you do not currently have a credit card then there a number of credit cards offering 0% interest, for a period of time, as well as reduced or no transaction fees,  but again make sure you check all the conditions.

Using a credit card will also require a degree of discipline to make sure pay off the balance on returning from holiday, and not end up still paying for this year's holiday next year.

Some of the best credit cards with no overseas transaction fees are:

Halifax Clarity

  • No worldwide load fee (exchange rate fee)
  • No ATM fee
  • Representative APR on spending: 12.9%
  • Representative APR on cash withdrawals: 12.9% if balance fully repaid, 12.9% if not fully repaid

Aqua Reward

  • No worldwide load fee
  • ATM fee of £3 or 3%
  • Representative APR on spending: 34.9%
  • Representative APR on cash withdrawals: 39.9%-59.9% if balance fully repaid, 34.9% if not fully repaid

Other good alternatives are the Post Office credit card or, if you are over 50, the Saga Platinum credit card.

Prepaid card

Prepaid cards are a fairly new way to take money on holiday,  you can put as much cash as you want on the card before the start of your holiday. These cards can then be used in a similar way to a credit or debit card as well as used to withdraw cash at an ATM, a pin number will be sent to you after setting up the card. Most cards will  allow you to check the card balance and add or withdraw funds,  either by phone or over the internet. The charges on these cards vary by provider, so again check the conditions. At present, prepaid cards are only available in the main world currencies but as their usage increases more currencies will inevitability become available.

Be aware - if you use a prepaid card when checking into a hotel or hiring a car you need to be aware that the provider may 'ring fence' an amount on your card to protect themselves against future charges for services used or damage incurred. Typically a hotel will 'ring fence' around £250, whilst with a car hire firm this could over £1,000. This amount will not be charged taken from your card but will mean you cannot use this amount until you have checked out of the hotel or returned the car. It may be wise, therefore, to use your normal credit card as security in these instances but make sure you settle the bill in the local currency as the providers currency exchange rate will normally provide poor value.

The current best travel prepaid cards are:

Caxton FX

Highly recommended - This is actually the card I use when I take money abroad. Easy to use, good value and very easy to top up.

  • Free cash withdrawals
  • No charges on spending
  • Top up is free via direct/debit or online
  • Currencies: Dollar, Euros
  • Exchange rate: one of the best rates out there,  determined daily by Caxton.

Find out more about the Caxton FX card.


  • Free cash withdrawals
  • No charges on spending
  • Top up is free via direct/debit or online
  • Currencies: Dollar, Euros
  • Exchange rate: the best prepaid card rate in the market, which is determined daily by Ukash.

Find out more about the Ukash card.

Travellers cheque

For years this was the most way to take money on holiday but more recently their usage has reduced dramatically due to the rise in the usage of cards.

Travellers cheque are still a viable option but there are a couple issues with this option.

  • Fees - there will be a fee charged for buying the cheques and another charged for changing them into the local currency.
  • Ease of usage - with the reduction in their usage, not all stores and restaurants will accept travellers cheques leaving you to change the cheques for cash at your hotel or local bank.

Best way to take money to the USA

The USA, and in particular Florida, is a popular destination with British holidaymakers and taking money to the USA has never been easier. Personally, I use the Caxton FX card as it has a great exchange rate and comes with a handy app that enables you to keep an eye on your money. You can also top your available cash through the app or online if you overspend at the theme parks. Although you can use a pre-paid card to purchase items, just like a debit card, I also make sure I have a credit card with me for larger purchases or in the unlikely event that my pre-paid card is not accepted.


In my opinion the best way to take money on holiday is a mixture of cash and a prepaid card, if available in the currency required. Keep the amount of cash to just the amount needed for low ticket items, such as taxis or tips,  leaving the card for bigger purchases or withdrawing top up cash when needed. Although withdrawing cash at an ATM may incur a small charge (usually levied by the ATM operator and not the prepaid card provider), this is a small price to pay for the security provided.

Final tip

If you are using a credit card to settle bills when abroad you will often be asked whether you want to pay in local currency or in pounds sterling. You should always choose the local currency otherwise the retailer can apply what is known as Dynamic Currency Conversion, which is likely to have a higher exchange rate than your card issuer and so the cost to you will be greater with the retailer pocketing the difference.

Other useful articles

7 ways to keep your money safe while travelling

How to save money on your travel insurance

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most of your money.

Simply find your nearest qualified and regulated adviser using the UK’s largest adviser search.


  1. William August 2, 2015 at 8:43 am

    Very useful advice,thanks, we are going to st Vincent and Barbados, trying to find the best way to take money over there.