The way you choose to manage your money when travelling can really make or break your trip. You’ve probably decided that you’re going to take a mixture of cards and cash, but how much cash, how many cards and which cards?
Here’s what will hopefully be some good advice for you…
Cash or Card(s)?
If you’re staying in the Eurozone things are easier, but chances are you’re not. It’s more likely that you will be visiting all those places you’ve always wanted to see and so you’ll need several currencies.
Okay, so fifty quid’s worth of X, fourty quid’s worth of Y and your debit card. Do they charge for using your card overseas, and what will you do with the currency you don’t spend?
Let’s look at some of the issues…
Types of Cards:
Debit cards – Odds are if you’re at the age where you’re looking into travelling independently, you’ll have some idea of how these cards work! They’re quick and easy to use, especially now that contactless is a big thing and you can link them to your mobile phone. However, the money available to you on a debit card is directly tied to how much is in your bank account, so make sure to keep an eye on this, as you could be in some bother if you run out!
Credit cards – These cards work similarly to debit cards, at least in a practical sense. The main difference is that instead of using your own money, you are effectively loaned some by the bank, meaning that you’ll have to pay it back. The danger with this is that if you are able to keep spending, even after you’ve (technically) run out, you’re in danger of racking up some serious debt – and if you’re a student, it’s not like you need any more of that!
Cash cards – These are way more basic than credit and debit cards. Unlike those, a cashcard only allows you to withdraw money from an ATM. They still require a PIN number and the likes and you’ll have to physically handle cash, which may be preferable for some of you.
Avoid extra charges by:
- Only using your debit card if the fees are low. If your card charges you every time you use it, use cash or a prepaid card instead.
- Withdraw larger sums and less often.
- Choose local currency or pounds if you are given a choice.
Most credit and debit cards involve some sort of charge for using your card abroad. For example, my Halifax card has a 2.99% non-sterling transaction fee. This can cause problems if you’re not aware, you’ll be spending more money than you think you are – even though it’s only a tiny amount extra each time, this can soon build up and leave you with nothing to spend.
A good way to avoid card charges would be to use a pre-paid cash card. You can pre-load these with the local currency before you go away, meaning there will be no costs for conversion, and there is no charge whatsoever for cash withdrawals over £200, or the local equivalent, making these a very safe bet.
Lost and Stolen:
While your first instinct will be to panic if your cards are lost or stolen while abroad, do not panic! Before you go away, make sure to look up the emergency contact numbers for your bank, which can be easily found online. You are also able to report your card as lost or stolen through some online banking sites. Through doing this, you will be able to block your card for as long as necessary, meaning no one else will be able to access your money. Some banks, such as Barclays, also allow you to request emergency cash in situations such as this, which can be arranged over the phone.
Cash / Currency:
It’s always good to carry cash while abroad – you might need it to pay for taxis, tips at restaurants, or in shops where there’s a minimum card spend. That being said, you should always try and limit the amount of cash you’re carrying on you, just in case. Travel insurance usually only covers between £200-£500, so if you lose any more than this, it’s highly likely that you won’t be able to get it back. Because of this, it’s good to double check your travel insurance policy, and adjust the amount of cash you carry so that you’re covered. It’s also a good idea to split the cash you carry, say half in your pocket and half in your rucksack.
Travellers cheques are a bit old school but they still have two advantages – they’re a good way to budget the amount you spend and you won’t need to carry large amounts of cash. The downside is you’ll have to find somewhere to cash them and you will pay both a fee to buy them and a fee to cash them.
From all of this, I would say prepaid cashcards and local currency are the ideal situation, giving flexibility with the right level of risk, with a credit or debit card having a great holiday at the bottom of your rucksack, whilst you’re out an about, and then in the hotel safe, just in case of emergency.
A WeSwap card is a good idea. It enables you to swap currencies with other cardholders and you can share that restaurant bill that’s got too many drinks on it because you were having such a good time, and avoid currency exchange fees. One of the great things about them is you can block and unblock yourself on the WeSwap App in case the card is either lost or stolen.