There are lots of things to think about before going on holiday. Where should you go? What should you do? What do you need to pack?
If you’re financially savvy, you might ask yourself what the best way to spend money abroad is. After all, travelling isn’t cheap, and it can be made more expensive by how we spend money in a foreign country.
When deciding on your chosen payment method(s) when travelling, there are several options to consider. This might depend on how expensive it is to make transactions or withdrawals, exchange rate fees, security, and getting the best value for your money.
With this in mind, here are the top 5 options to consider to decide the best way to spend money abroad for your trip.
1. Prepaid Travel Cards
When you use your regular bank card to make payments abroad, you usually pay significant international fees, whether withdrawing money from an ATM or buying a meal at a restaurant.
With a prepaid travel card, you can pay for what you like without paying international fees. You only pay for the price listed on whatever you’re buying – whether it’s a meal out, a boat ride, or a souvenir for a friend – without being surprised by bank fees that hike up the price of every purchase.
Using a prepaid travel card has many other benefits besides this, including:
· Can be used anywhere – well, anywhere that accepts cards.
· Help you stick to your budget – since it’s easy to forget to factor in international fees when treating yourself on holiday. With no fees, there are no worries. You can also add a set amount to the card to curb your spending. Our card has handy payment control features for travellers that can also help you to avoid overspending and budget whether you are travelling lavishly on a high budget or travelling affordably on a low budget.
· Safer than carrying cash – cash is easily stolen and rarely tracked down.
· You can freeze your prepaid travel card like a regular debit/credit card. This means you can protect your money even if your card is lost or stolen.
2. Cash
Many people say carrying cash is the best way to spend money abroad because you aren’t subject to banks’ pesky international fees, and it’s undoubtedly one of the better options.
Several factors make cash the best way to spend money abroad:
· No fees for spending abroad
· It can help you stick to your holiday budget – if you only take a certain amount of cash (a.k.a. the amount you plan to spend), you’re more careful about what you spend it on and always know how much you have left.
· Can be used anywhere – aside from cashless, card-only establishments.
However, this is only a better value option if you exchange your money before you come to the country or after you’ve landed at a currency exchange, but not at the airport. Airport currency exchanges charge extortionate exchange rates because they know they’ve got travellers, hostage.
Make sure not to get this cash out of ATMs when you’re abroad. Even though you’ll technically be paying with cash, you won’t escape being charged international fees from your bank if you withdraw money in a foreign country.
Lastly, be wary of theft since cash is easily stolen and rarely tracked and returned. Keep some money in your wallet in a secure bag or pocket.
3. Debit Cards
Many people use their debit cards in foreign countries, though it’s not the best way to spend abroad since many debit cards charge international transaction and withdrawal fees.
However, sometimes the cost of convenience can be worth it – and a debit card is what most people are used to using at home. If convenience is more important to you than paying a little extra on your purchases, then using a debit card might be the best way to spend abroad for you.
For each card transaction you make abroad, you can expect to pay 0-3% of the value of the purchase as a fee. For each cash withdrawal from a foreign ATM, you can expect to pay 0-2.75% of the value of cash withdrawn.
Several advantages make using a debit card the best way to spend abroad for some:
· Convenience – you don’t have to take any extra steps before your holiday to begin paying for things abroad.
· Safer than carrying cash – thieves are less likely to steal your card than cash. You’re also less likely to lose your card since it stays in a slot in your wallet while you travel.
· You can freeze your debit card if you lose it or it gets stolen, so the funds in your bank are protected. However, this is still less secure than a prepaid travel card since – before you freeze the card – there’s a chance the thief will be able to access all your bank funds.
4. Credit Cards
Though there are some benefits to using a credit card in foreign countries, most wouldn’t consider it the best way to spend money abroad due to the cost.
You can expect to pay a 0-3% fee for transactions abroad. For withdrawing cash, it’s significantly more expensive than using a debit card with a 0-5% fee per purchase.
What’s more, you’ll be charged interest on your cash withdrawals. The interest rate ranges from 6.5-70% and can be incredibly expensive.
However, credit cards do have some benefits, including:
· Convenience – lots of people use their credit cards habitually, and you don’t have to take any extra steps before your holiday to pay for things abroad.
· Safer than carrying cash – like a debit card, thieves are less likely to steal your credit card than cash. You’re also less likely to lose your card since it stays in a slot in your wallet while you travel.
· You can pay the bill later – this is the most significant benefit of using a credit card abroad. If paying later makes things easier for you – perhaps you’re waiting on a big payment, but you need funds for your holiday now –this might be the best way to spend abroad.
5. Traveller’s Cheques
Historically, traveller’s cheques were the best way to spend money abroad in terms of security and avoiding fees. Though they’re not commonly used anymore, they offer the same benefits.
Here are the main ones:
· It can help you stick to your holiday budget – if you only take traveller’s cheques amounting to a specific value, you always know how much you have left in your budget to spend.
· Safer than carrying cash – like cards, traveller’s cheques are the best way to spend abroad because they’re unlikely to be stolen. If they are, many providers give a refund for the value of the cheque.
However, it’s important to mention that travellers’ cheques aren’t used much anymore – and not everywhere accepts them as payment.
Spending Money Abroad with the HyperJar Travel Card
The best way to spend money abroad depends on what’s most important to you, whether that’s making your holiday more affordable, ensuring you keep your finances protected when you’re travelling, being able to pay the bill later, or convenience.
The HyperJar prepaid travel card is the best way to spend abroad. It’s safer to carry than cash, convenient to use, and you don’t have to pay any pesky transaction or withdrawal fees that rack up with a bank card. You can freeze and unfreeze your card and even plan your holiday budget with the HyperJar app. See HyperJar’s travel features or check out the HyperJar app to find out more.
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