Don’t let the crisis spoil your holiday: our travel money guide will put you in the right place


With millions of us flying away for the summer holidays in the coming weeks, it would be entirely understandable if the pressure on the cost of living accompanied the trip as a nagging fear in the back of our minds.

But fear not – there are ways to add value to the money for your holiday expenses. And this year, these tips and tricks will be more important than ever as the cost of everything from groceries to fuel rockets soars here and abroad. Also, in some areas like the US, the pound is worth less due to the depreciation of the pound sterling.

Just a few tweaks to the way you spend your holiday can save you hundreds of pounds – and keep your summer holiday affordable.

So follow our handy guide…

The pound has weakened significantly against a number of currencies in recent months but has held up against others. For example, a vacation to the US will be more expensive this year than in 2021 as the pound is down 13 percent against the dollar – so for 100 pounds you will buy $120 now instead of $138 last summer.

The exchange rate against the euro is largely similar compared to the previous year. However, thanks to the depreciation of the Turkish currency, £100 will get you 2,014 Turkish liras, up from 1,205 last year.

When it comes to spending abroad, you have four main options: debit card, credit card, cash or a prepaid currency card. Each has its own pros and cons.

Let’s go through one by one:


Spending with your ordinary debit card can cost you dearly. You will often be charged a transaction fee of up to three percent for payments in a currency other than sterling. You may also be charged an additional fee for using ATMs, which is either a percentage of the amount you withdraw or a flat fee. According to financial data company Moneyfacts, a typical debit card costs £11.88 to withdraw £250 in cash abroad.

If you want to stick with a debit card, you’re far better off choosing one that doesn’t charge any fees – and there are quite a few on the market. Monzo Bank, Starling Bank, Virgin Money and Chase all offer checking accounts that come with a debit card and allow for fee-free withdrawals and payments abroad.

If you want to use a debit card, you’re much better off choosing one that doesn’t charge any fees

You need to open a checking account to get the debit card. However, don’t switch your primary checking account just to get the best debit card for spending abroad. Just open a second one.

If you’re happy with the new account and think it offers better value for money and a better customer experience than your old bank, you can always use the current account switching service at a later date to transfer all your direct debits and standing orders to move to the new provider.


Buying foreign currency in cash can be an inexpensive way to spend money – as long as you plan ahead. Count on it at the last minute and buy cash at the airport, and you’ll be stung with expensive fees and stingy conversion rates.

Make sure you shop around ahead of time to get the best deal. The three factors to consider are fees, conversion rates, and shipping costs unless you’re collecting your money in person.

There is a good travel money comparison tool on the MoneySavingExpert website.

Using cash can be a smart way to plan your budget and keep track of exactly how much you’re spending. Of course it comes with risks as it can be lost or stolen and you miss out on the consumer protections that you would get by paying with a credit card.

Using cash can be a smart way to plan your budget and keep track of exactly how much you're spending

Using cash can be a smart way to plan your budget and keep track of exactly how much you’re spending

When buying foreign currency, make sure you’re paying with cash or a debit card – credit card companies may charge you a fee for treating currency purchases as cash withdrawals. And don’t be fooled by currency exchange bureaus’ claims of “0% commission” – you’re just paying through less generous exchange rates instead of an upfront fee.

The best offers are constantly changing. According to MoneySavingExpert on Friday, the top exchange rates from £500 to euros were offered by TravelFX, which would change that sum to €569.25. You pay a 0.299% fee and £5 for delivery on orders under £700. Second best was Tesco at €569.15 for £500. Postage is £3.95.


Most credit cards charge fees for spending abroad – usually around the three percent mark. That can add up quickly.

However, there are some that don’t charge fees for spending abroad, including the Barclaycard Rewards Visa card and the Halifax Clarity Mastercard.

Make sure you pay off the credit card in full each month or you’ll be charged interest that far outweighs any currency savings. Also remember that you must pass a credit check to get a new credit card. Cash withdrawals on credit cards are also noted on your credit report. The danger here is that lenders will take this as a sign that you’re short on cash on your checking account and are using your credit card instead. To be on the safe side, anyone who wants to apply for a loan in the near future should refrain from withdrawing cash abroad with a credit card – even if it offers a cheap rate.

As with domestic credit card spending, you have strong consumer protections if something goes wrong with a purchase made with your card abroad. Purchases over £100 are protected by your credit card provider, so you should be able to request a refund from them if there is a problem with a purchase.


These are payment cards that you load with money before you leave and use them like a debit card.

The advantage of this option is that they usually offer good exchange rates. You can also use them to buy currency well in advance. If you think the value of the pound sterling is likely to fall by the time you go on holiday, lock in the current exchange rate now.

Such a lock also offers certainty about how much you have to spend.

Options include prepaid travel cards from FairFX, EasyFX, Revolut, and Wise.

Watch out for card postage fees and costs for using the cards abroad. Some cards also charge “inactivity fees” if you don’t use them for a while – so don’t just put yours in a drawer until next year if you still have money on it.

TOP TIP: Rent a car? You need a credit card.

Most car rental companies require the use of a credit card and do not accept debit or prepaid currency cards as a method of payment.

That’s because they want peace of mind that if something goes wrong, they can recover any expenses from you.

With a debit or prepaid currency card, there is no guarantee that you will have enough funds in your account to pay the bill.

In some cases, petrol stations and motorway toll booths may have similar restrictions.

TOP TIP: Pay in local currency, not sterling.

When making a payment or withdrawing cash abroad, you will often be asked whether you want to pay in sterling or in the local currency. Always choose the local currency.

If you choose to pay in sterling you are locked into that bank or merchant’s conversion rate – which is likely to be far stricter than the rate charged by your own bank

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