Finding a holiday is the easy bit, getting your spending money sorted can be a lot more hassle, so what are your options?
Less common now, but they are secure. Each cheque has a serial number which means if they are lost or stolen they can be replaced. However this peace of mind comes at a price. They can be expensive to convert to cash, and finding somewhere that accepts them isn’t always that easy. They can be commission free, but there are admin charges and you are at the mercy of the exchange rate set by whoever cashes them.
Bureaus de Change
Commission free, but rates vary depending on the local competition. Never use one at an airport or a port as the overheads for these are high, so the exchange rate isn’t that favourable. In most cases with banks, the Post Office and standalone Bureaus the difference in rates won’t make that much different for the average holidaymaker, so factor in convenience too. Watch out for debit card fees, and remember that if you use a credit card you will be charged a fee by the Bureaux and by your credit card provider.
Some only exchange cash for cash, which can be a pain if you need money in an emergency.
Usually have better rates, but are they any better once postage is factored in? And there are the credit and debit card fees too.
However sometimes you can order online and collect and pay locally.
Debit and Credit Cards
Use them just like you would at home, so very convenient and saves carry cash around. But banks charge you a fee, around 2.5%, but this can be more.
Some banks and building societies have cards specifically for use overseas, and these can be cheaper.
However withdrawing money from a cash machine or ATM should only happen as a last resort. Some credit cards charge you interested straight away, no matter if you pay off the balance in full.
Loaded or Prepaid Currency Cards
The best way to get hold of holiday spending money. These are loaded with money either over the phone of online and are used just like a debit or credit card. The rates are fixed at the point that you loaded the money; there aren’t any transaction fees, apart from using some ATMs. However don’t use them in the UK by mistake.
So my advice? Work out which is the most convenient method and instead of studying the exchange rates, work out how much you will get for your money once all the fees have been paid.