The top 4 best (and cheapest) ways to spend your money abroad (2024)

If you have a holiday planned, it can be easy to focus on all the fun activities and overlook the best ways to spend while abroad.

Choosing the wrong way to spend abroad could leave you with less protection – and could cost you a lot in avoidable fees.

Here are some of the most efficient, cheapest and safest ways to spend your money abroad.

1. Travel debit cards

You can use your trusty debit card, but this can be an expensive mistake as you may end up paying unnecessary fees when you spend or withdraw cash from an ATM.

Of course, if your card offers fee-free spending abroad, this isn’t an issue.

If you open a new bank account, check whether you need a soft or hard credit check, as the latter can impact your credit score and affect how much you can borrow in the future.

Another big disadvantage is that you don’t have Section 75 protection with a debit card, but you may get chargebacks.

So, if you don’t get something you paid for and you’re refused a refund, you can ask your bank to reverse the transaction via a chargeback.

2. Travel credit cards

Credit cards offer Section 75 protection.

So, if you buy something that costs over £100 and less than £30,000 and don’t receive it or it is faulty or broken, you may be able to get your money back as the lender, and the retailer, are equally liable.

You’ll also benefit from decent exchange rates, but it’s worth checking whether your travel credit card will charge any fees.

One downside is that you need to pass a credit check and pay off your balance in full every month to avoid high interest.

It’s also best to avoid withdrawing money from an ATM using a credit card as this is marked on your credit file, and you’ll usually be charged interest.

3. Prepaid travel cards

You can load prepaid travel cards with cash and lock in an exchange rate in advance.

Similar to debit and credit cards, it’s wise to check any fees before applying for a prepaid travel card.

Locking in an exchange rate can be both good and bad, as you’ll know what rate to expect, but you might not necessarily get the best on offer.

If you’re on a budget, a prepaid travel card can help you stick to one, although you can always top it up if you’re running low on cash.

While you can block the card if it goes missing or it gets stolen, and you may be able to use chargeback, these cards might not be accepted everywhere.

4. Cash

Planning on exchanging cash? Pay by debit card, not a credit card, to avoid fees and interest.

Cash is helpful in emergencies, but you should make sure you have a safe place to keep it so you reduce the likelihood of losing it or getting it stolen.

If you’re keen to stick to a budget or want to lock in an exchange rate, cash can be useful.

And if you end up with too much cash, you can save it for your next trip or sell it back to a bureau de change.