/ Money

Travel money myths and why I miss travellers’ cheques


Getting travel money used to be simple. When I first went abroad to Greece 20 years ago I brought travellers’ cheques – like everyone else seemed to do at the time.

After a childhood of holidays mainly spent in south coast seaside resorts (anywhere with a crazy golf course) the first trip abroad was unbelievably exciting. And the ceremony of buying travellers’ cheques was part of it.

They seemed like official documents on the same standing as your passport or your birth certificate.

My faith in their mystical powers was slightly diminished on arriving in Greece to find the banks were on strike – as apparently they often were in September – and there was no way of changing the travellers’ cheques for drachmas.

It was a nervous moment – not helped when the banks were joined on strike by other services. There were power cuts, the water went off. The locals didn’t seem bothered. Even when the rubbish collectors went on strike, they simply escaped to outdoor cinemas set in little parks where the stench was drowned out by the smell of bougainvillea.

Still eventually the banks did open – and my faith in travellers’ cheques was restored.

What form of money did you bring?

Fast forward 20 years and on holiday with friends this summer, it struck me for the first time how many different ways each of us had got our travel money. Not one of us had brought travellers’ cheques.

One of the group swore by cash – then fretted for most of the holiday that it would be stolen. Another had bought a pre-payment card.

My brother relied on using his debit card to buy most things, without even bothering to check the charges because he reasoned they probably wouldn’t amount to much.

In fact, our research has found that around 95% of the debit and credit cards on the market charge fees when used abroad. The charges may seem small but can quickly add up over even a short holiday. Among the top chargers abroad are Halifax, Santander, TSB, Lloyds Bank and Bank of Scotland debit cards. These apply separate purchase and cash machine withdrawal fees, as well as a foreign loading fee across all transactions.

On the other hand, the Halifax Clarity, Nationwide Select Visa, Post Office Platinum, Saga Platinum credit cards charge little or no fees for use abroad. And the N&P Gold debit card also charges no fees.

Should you pay in sterling or local currency?

Another question that preoccupied us was whether to pay in local currency or insist on handing over sterling. Known as Dynamic Currency Conversion (DCC), it lets you pay in either sterling, where the exchange rate and commission is set by the retailer’s bank, or the local currency and rely on the exchange rate offered by your card’s network provider, plus any extra fees.

We compared 15 transactions that Which? Travel researchers made on recent trips. With a card that has no foreign loading fees, such as the Halifax Clarity MasterCard, we’d always have been better off paying in the local currency. But, if we’d used a card with high overseas fees there wasn’t much difference – both were a poor deal because of all the charges.

In general, we found it’s the card you use that makes the biggest difference, not the currency. The cheapest method of all is to pay in the local currency with a card that makes no overseas charges.

How do you like to take your money on holiday  and how do you choose to spend once you get there?

Sue Arnold says:
27 June 2015

Why didn’t you mention Nationwide Flex Direct. I can withdraw cash at ATMs with no charge and an excellent exchange rate and buy goods with my credit card with no fees.


On the contrary, all Nationwide cards now charge a cash withdrawal fee. See http://www.nationwide.co.uk/support/travel/fees-charges#xtab:foreignCash

Harold says:
28 June 2015

There are no charges for a Nationwide FlexPlus Debit card


There are charges for Nationwide FlexPlus. It costs £120 per year (10 per month).

geoff says:
27 June 2015

I now use a prepaid card in Europe, pre-loaded with Euros. The card is readily accepted and the payment in Euros is simply deducted from the total remaining on the card. The only charge is when loading the card. If the card is unused for 12 months, a small deduction is made.

Reg says:
27 June 2015

I have found one issue with this type of card. They are generally not accepted at garages with auto card systems, also the same at all toll road barriers in Spain and France which are never manned. I used the Post Office pre paid card.


In one supermarket the voice on the self service til is so impatient that you’re always being prompted to go faster. It is so annoying that I sometimes shout back shut you stupid woman.

The other point is politeness. Most till say remove your card. Few add the word please


Hi Chris, thanks for sharing your views about self-service tills, however, they’re off-topic for this particular conversation. Here’s a better place for posting your comments ➡ 🙂 :


Eileen says:
27 June 2015

If we go to America we still use travellers cheques. They can be used to pay for most things and there is no charge.


No charge? You must be joking. Even if there’s no visible charge, don’t forget the hefty charge that is built into a poor exchange rate when you buy the travellers’ cheques. Compare the rate to the live wholesale rates at http://www.truefx.com, and the percentage difference from this rate is the charge you’re paying. With a credit card, you get a rate very close to the wholesale rate, sometimes even better.


I always shop around online for the best value to collect around £200 worth of the local currency before travelling – usually this turns out to be obtained by paying online then collecting at one of the supermarkets. I then draw currency abroad from ATMs by using my Halifax Clarity Card rather than my Nationwide Flex because Mastercard invariably offer a better rate than Visa and use the Clarity card for purchases where appropriate. My bill is paid in full by direct debit so that, despite spending between £2,500 and £3,000 whilst abroad, my total charges end up being well under £10 as they comprise only interest.


You can even avoid the interest charged by Halifax Clarity by paying off cash withdrawals as soon as they appear on your account. Using Halifax’s and your current account’s smartphone apps, this is extremely easy to do while travelling.

Why do you get around £200 of the local currency before travelling? Every airport has cash machines so you get the local currency upon arrival. This is an unnecessary expense.

David says:
27 June 2015

“We compared 15 transactions that Which? Travel researchers made on recent trips.”

Not exactly in-depth research!

I use a Santander Zero credit card for most things, and a pre-paid FairFx debit card in ATMs. I believe I’m getting a good deal, but what I really need is Which to make the same transaction at the same time in a number of different ways to prove it.