Choosing the Best Payment Option for Your Trip Abroad

When it comes to managing your travel money, a little planning can go a long way in saving you significant amounts. Instead of resorting to last-minute currency exchanges at the airport or accepting high fees from your debit card issuer, consider these options for a more cost-effective approach to payment during your holiday.

1. Travel Credit Cards vs. Debit Cards Specialist travel credit cards offer several advantages, including the avoidance of foreign currency exchange fees and the ability to secure the best exchange rates. These cards also provide excellent protection in case of any issues with your purchases. Additionally, credit cards are often necessary for services like car hire abroad. To maximize the benefits, opt to pay in the local currency rather than your home currency.

If obtaining a credit card is challenging due to credit score or repayment limitations, travel debit cards can serve as a viable alternative. They typically don’t impose flat fees or percentage cuts like regular debit cards and are particularly useful for cash withdrawals.

2. App-Only Banks and Payment Platforms App-only banks provide an alternative method of payment abroad, offering fee-free transactions and withdrawals. Monzo, available to UK residents, allows unlimited fee-free cash withdrawals in the UK and EEA, and up to £200 (€230) per month elsewhere. Curve, a payment platform consolidating debit and credit cards, permits up to €1,000 fee-free spending and up to €200 free cash withdrawals per month for UK and EEA citizens.
3. Prepaid Travel Cards While prepaid travel cards may offer slightly less favorable exchange rates, they remain a convenient option. These cards are especially useful for adhering to a strict budget, allowing you to load a specific amount onto the card. They also enable you to lock in exchange rates before traveling, a beneficial feature in countries with volatile currencies. Additionally, prepaid cards can be blocked if lost, providing added security.

Revolut, available to citizens of EEA countries, Australia, Singapore, Switzerland, Japan, the UK, and the US, offers competitive rates on weekdays and free withdrawals abroad of up to €200 per month.

4. Cash as a Backup Carrying a small amount of cash is often essential when traveling to many destinations. It provides flexibility and can be particularly useful in situations where card payments are not accepted. However, be cautious not to lose cash, as it may not be covered by insurance. Exchanging money at the airport should be avoided, as rates are generally less competitive. Opt for online currency exchange services that offer airport collection, ensuring better rates and convenience. When purchasing holiday money, it’s advisable to use a debit card rather than a credit card to avoid additional fees and interest charges.
5. Cryptocurrency as a Payment Option For the growing number of global crypto investors, digital currency may be an appealing method of payment abroad. Crypto payments offer benefits such as avoiding currency exchange fees and providing easy international access. Cryptocurrency transactions are secure and encrypted, reducing vulnerability to fraud and hacking. Major adopters of crypto payments include countries like Switzerland, Austria, Portugal, Slovenia, Germany, Canada, Australia, France, Spain, the UK, and Japan.

However, cryptocurrency prices can be highly volatile, making it challenging to keep track of your spending. Using stablecoins or closely monitoring exchange rates can help mitigate this issue. Using crypto for payments requires technical knowledge, such as understanding digital wallets and transaction processes. Testing your payment method before your trip is recommended. Crypto payment cards that convert cryptocurrency to regular currency at the time of the transaction can simplify the process.

When using cryptocurrency, it’s crucial to prioritize security by storing private keys in offline “cold wallets,” enabling two-factor authentication, and avoiding public Wi-Fi when accessing your wallet.