Travel money: The basics

There are so many options available when you want to get hold of foreign money to spend on your holiday that it can make your mind spin. And that’s before you get to all the different fees and charges you need to keep an eye on.

If you’ve got a holiday, business trip or other travels around the corner - don’t panic. Our step-by-step guide will tell you everything you need to know from which currency you need to how to get the very best deal when buying foreign money.

What is travel money?

It is the currency you use to pay for things abroad. Different countries use different currencies, which means you need to buy things with money like euros and US dollars instead of pounds sterling.

What currency do you need?

It depends on which country you are visiting. Most have their own currency but some share with other nations.

Some countries also use another currency on a more informal basis, like in Mexico where the US dollar is often accepted alongside the Mexican peso.

You can check which currencies to use for all the countries worldwide at fxtop.com.

What is an exchange rate?

It tells you how much foreign currency you can get in exchange for your existing currency.

For example: If the GBP to EURO exchange rate was 1.37, you would get €1.37 for every pound you exchanged.

Exchange rates change from day to day and from one provider to another, so make sure you shop around and compare rates to find the one that will give you the most travel money in total.

Some travel money companies will give you a better rate if you buy a large amount. Even if it is only slightly better, it could save you money if you are exchanging a big lump sum for yourself or a group.

You can pick up tips on getting the best deal on travel money by reading our guide.

How much travel money will you need?

Knowing how much money you need when you go travelling depends on how much things cost, what you plan to do and how long your trip will last.

Set a budget on how much you want to spend and make sure to set aside a little extra in case of emergencies. Work out how much you can afford to spend on the following:

• Eating out for snacks, breakfast, lunch and dinner.

• Drinks, including alcohol.

• Shopping for souvenirs, food, clothing and toiletries.

• Travel by taxi, train or bus.

You may not need to budget for everything. If, for example, you are going on an all-inclusive holiday you may not need money to pay for your food or drinks while you are away.

You can compare the cost of common expenses in each country by visiting the Numbeo website.

How much travel money can you buy at once?

It depends on the travel money company, as each has its own minimum and maximum amounts that it will let you order.

Although you may not be planning on taking a large amount of foreign currency on your trip, be careful of any cash restrictions for taking money in and out of the UK, for example:

If you take more than the equivalent of €10,000 from the UK to a non-EU country, you have to declare it to customs or risk your cash being seized. Find out how on the GOV.uk website.

Where can you buy travel money?

• Online: There are lots of travel money companies that let you order currency online with the option of home delivery or collection.

• Bureau de change: You can visit travel money companies on the high street or at the airport to convert your pound sterling into a foreign currency in person.

• Abroad: You can withdraw money using your debit or credit card at a foreign ATM. This can be quite expensive due to foreign usage fees, but some banks offer fee-free international use, which can be one of the cheapest ways to get holiday cash.

• Take a travel money card instead: Lots of travel money companies offer prepaid travel money cards online and in-store. You just top up the card with pounds sterling and withdraw foreign currency* from an ATM abroad.

* Not all travel money cards are suitable for every type of currency, so make sure to check with the provider before applying.

Never buy at the airport

Buying at the airport is very similar to buying on the high street, but it is usually much more expensive.

If you have to get your travel money at the airport, pre-order it online first to get a better exchange rate.

Here is how to get the best deal