Cash is no longer king, particularly when we travel, if the saturation of travel cards or prepaid currency cards are anything to go by. There are so many options that could help you use currency cards abroad, which could be a streamlined and safer way to move money and to use as you travel through foreign countries. The best currency cards abroad will depend on what an individual wants to use it for, options include:
- Multi Currency Debit Cards
- Single Currency Debit Cards
- Sterling Prepaid Cards
In this article, we will look at why currency cards abroad are becoming an increasingly popular option and look to answer some questions about travelling without cash.
Best Things To Know About Using A Prepaid Currency Card Abroad
One of the best things about currency cards is the affordable and competitive rates that they can offer travellers. Services such as TransferWise help their customers gain competitive rates, similar to those shown on Google or Reuters. Customers transfer one currency into another by transferring their pounds, for example, into a British bank account. TransferWise’s service then sends the desired currency directly from an account for that currency, (i.e. dollars or euro). This means that the costs of conversion are reduced, which helps customers avoid expensive fees, which could rack up when converting a lot of money for a long trip. It is expected to be eight times cheaper than using a regular, high street bank.
Another plus point that might encourage you to sign up for a to take away with you is that it could provide you with the back up funds you need in case something goes wrong. We recently wrote about holiday nightmares and the regulating bodies that could help you out when you are stranded abroad because of reasons beyond your control. However, it’s not just these instances in which something could go wrong when travelling; an unexpected fine, medical issue without the proper insurances and so many other things that could happen and require urgent money.
A same day loan could help you out in emergency situations, as you in most cases, you could get money in your account on the same day you apply if approved, but taking currency cards abroad, preloaded with a little cushion of cash means you could have money on hand in emergencies, should you need it. The downside to this is that travellers will need to have those funds available on them, whereas an emergency loan is a form of credit that can be paid back over three months, but this would incur interest and will be subject to affordability checks. If you don’t have the money readily available to load a multi-currency debit card, you might consider comparing credit cards that offer low fees for overseas spending.
Another big pro for carrying currency cards abroad is that is prevents the need for carrying cash around with you. This could be particularly beneficial if you are travelling for a long time or looking to enjoy a lavish trip, because it means you do not have to draw out all the money you expect to take at once. The best currency cards can be cancelled just like a credit or debit card if they are lost or stolen. You will just need to call the provider and notify them of your situation, which could mean you don’t lose any money!
Is It Better To Buy Currency At Home Or Abroad?
Just under half of UK holidaymakers look for the best rates when changing money up. This could be contributing to negligent financial behaviour. However, as Brexit continues to cause fluctuations in currencies it could be more worthwhile than ever before to investigate if it’s better to buy currency at home or abroad. The answer to this could depend on whether you are converting money back to your home country’s currency or are considering the best time to exchange before you go away.
Unfortunately, there is no definitive answer for whether it is better to buy currency at home or abroad. Currency moves are complex and there are lots of factors that affect rates. Political turbulence that could affect the UK’s economic standing, such as Brexit, or other fluctuations to the pound and thus your exchange rates, is relative to the currency you are looking to convert to, which is why it could always be worth investigating the benefits of exchanging at home or abroad. For example, the pound dropped against the euro and the dollar after the result of the Brexit referendum. However, the pound dropped more dramatically against the dollar, because this currency stayed strong as it was not as affected by the result of the Brexit result whereas the euro was.
If you are worried about getting the best exchange rates and aren’t opting to use currency cards abroad, you might consider booking your exchange in with a provider. This means you order your funds for collection and can monitor the performance of the exchange markets. If the pound improves, you could cancel your order and make a new one so you can react to any volatility.
The key thing you might want to avoid if you do decide to exchange money is airport bureau de changes. Reports highlight that an anticipated £21million is ‘wasted’ at airports in the UK every year, because of the overpriced bureau de changes. Consumers perhaps use these services because they didn’t get time to access somewhere that provides a better rate, and they have to accept rates like €0.80 to the £1, out of urgency and necessity.
Can You Buy Currency With A Credit Card Abroad?
Technically, it is possible to buy currency abroad with a credit card. However, this may incur some expensive fees and might not offer a favourable exchange rate, particularly if you are converting pounds into the currency used in the country you are in. Buying currency with a credit card abroad might be an option if you run out of money and need access to cash quickly.
When you use currency cards abroad, you could benefit from ultimate flexibility. Unlike with the traditional method of changing up money at the bureau de change, in which you have a fixed amount of cash to use, with some multi-currency debit cards and the best currency cards you can top up with anywhere, using your online banking apps and the app that comes with the card.
Reports show that 42% of holidaymakers get ‘carried away’ with their spending when travelling. This could mean that taking a fixed amount of cash away with them is a smart way to keep a cap on their spending. A cheaper alternative to drawing out foreign currency abroad might be to choose the best currency cards abroad that allows you to use prepaid funds or a line of credit in an emergency.
When Using Credit Card Abroad, Should I Pay In Sterling Or Local Currency?
When travelling abroad you might be given the option to choose to pay in the local currency or pounds sterling. This option also appears when you are drawing out money from an ATM abroad, using a British credit or debit card, as well as prepaid currency cards. Paying in sterling when it is not the used currency could mean a fee, which is called the Dynamic Currency Conversion. This means that when you pay in pounds, you are charged an exchange rate into sterling. Merchant services providers, processors and individual banks are permitted to set the conversion rate that you will be charged to convert the money to sterling. On average, this is charged at 7.7% of the transaction value and thus could be an expensive way to travel. If you are presented you with the options to choose between two currencies (i.e. sterling and the used currency wherever you are), you should opt to pay in the local currency. This could help you avoid fees and reject the exchange rate.
If you do experience a financial emergency when you are abroad, Wizzcash are a payday loan direct lender. This means we could help when you need emergency cash whilst abroad, as long as you are a UK resident. Other criteria do apply, and loans are subject to a successful application. You can find out more about how it works on our website.