Travel Money - Cash Vs Plastic Vs Travellers Cheques

The UK market for Traveller's cheques has been in steady decline for a
few years, despite the overall increase in travel (source Mintel
Market Research - Holiday money UK). This has been caused by a number
of factors, not least being the increased issuance of credit cards and
debit cards, and the extent to which they are accepted abroad. Support
for the use of cards and the undermining to Travellers Cheques has
been further eroded by the massive growth in the worldwide ATM
network. This is coupled with the perception (and fact) that TCs can
be a pain to cash. Especially at weekends or if you run foul of local
bank holidays (quite likely in Spain where there are local bank
holidays!)I can cite my own example of this. Trying to pay by credit
card in an Ibiza restaurant in 1988 was an offline transaction that
had to be supported by a passport and they were most reluctant despite
displaying the Visa symbol. Fast forward 20 years and you have no
problems using cards in restaurants and bars, even in out-of-the-way
places. The problem is more likely that your card issuer will 'stop'
the transaction as suspect because it is not chip and pin. It is now
routine to pay in Supermakets and virtually all shops by card; this
wasn't the case a few years ago when cash was still king.Cash and
Travellers cheques do have one big advantage for the budget conscious
its much easier to keep track of what you're spending especially if
trying to keep to a daily budget!One of the reasons I decided to write
about this topic was that I came across a post on Galavanting.
Essentially they were saying why take TCs, you find it hard to pay
with them, you get charged to buy them or to cash them or lose in the
exchange rate. These are all true - you also have to keep track of
which ones you use.




However I can give you one reason to use them: if you only have one card,
if you are travelling alone, if you are travelling in remote areas. If
some or all of these apply think on this. The reality for most card
issuers is not like the old ads - they will not be rushing you a new card
within 24 hours. If you lose your card, have it stolen, the mag stripe and
or pin packs in, then you have a problem if this is your only means of
payment and getting cash. Your card could also get skimmed (ie cloned) and
then maxed out. If any of these things happen you possibly have a huge
problem.Never ever ever travel with only one means payment and a bit of
cash. Always have a back up and dont travel with it if possible. If it is
not possible keep one/some on your person and one/some secreted in your
luggage somewhere secure. This applies even if you are travelling with a
partner - there is always the possibility of both being mugged. Wiring
money from friends or relatives is expensive and fraught - especially if
you and they have not done it before.Don't carry more plastic than you
need at one time: Anyone who has lost a wallet or purse knows the
heartache of having to ring round cancelling half a dozen cards. This is
even more painful abroad. Take cards you won't be using out of your wallet
and leave them at home, in your room or hotel (hide them or put them in
the safe).Try and avoid running your cash down to the last cent/penny/euro
before getting more. Always keep one large denomination note somewhere
safe. Don't forget flights can be delayed on the way home as well as the
way out - so don't spend it till your confident it is safe to do so.
Relying on your airline or tour operator to provide you with emergency
food and drink would be a fools paradise, as they only provide the bare
minimum where there are substantial delays.Cash versus CardObviously it is
unwise to go around carrying large amount of cash. Well I say obviously
but I know some people do this. If you are not careful this will attract
attention and increase your chance of being robbed. Having to dive into a
money belt just draws attention to the fact your wearing one - so avoid
this by carry ready money in a purse or wallet.OK so cards win out over
cash on security grounds - and we've discussed some of the back up
strategies for cards. But when it comes to making purchases which is the
better route (pay by card, exchange money using your card, or get money
from an ATM). This is much less clear cut and depends largely what type of
plastic you pack.Bear in mind if you use a credit card in a bureau de
change (BdC) your card company will probably treat it as a cash advance
and clobber you for interest and 1.5 to 2.5%, as well as any charges made
by the BdC.If you are given the option to pay by card but in sterling (or
your native currency) there will probably be a hidden agenda, like the
exchange rate you get will be very poor. This is called dynamic currency
exchange as a rule always decline this offer.These days most card
companies charge you a % of the transaction if it (the purchase) is not in
your native currency. This does vary widely. It started a few years as as
a modest 0.75% and has been steadily climbing ever since as it not
something most of us consider when choosing a card. It can now be up to a
massive 2.75%Typical (but is does vary widely) debit card charges for
withdrawing cash from an ATM abroad are £1.50 flat and 2.75%. However
the rate of exchange is usually very good and close to the wholesale rate
of exchange. However you wont know what that is going to be. Charges on
credit cards can be similar but interest will start to accrue for the day
of withdrawal (unlike with a purchase).




As a rule if you make a purchase by credit or debit card you will get
decent exchange rate and you will only have to pay the 2.75% or whatever
the transaction rate is.Charges on debit and credit cards used abroad are
now so high that I urge to check your terms and conditions so that you
know what you're in for. Bear in mind if you use a credit card you get
protection on purchases over £100 (section 75 protection) you will
not get this with a debit card.You can get more information on where to
exchange money and how to pay when you're abroad from our website Holiday
Travel money page. One last tip don't wait till you get to the airport
before changing money, see the travel money page, for the best ways and
means to do this.The best credit card on the market, currently, is Abbey's
zero card which at the time of going to (word)press doesn't make
transaction withdrawal charge for cash and has no Forex loading. But you
do pay interest from the date of withdrawal.Debit cards of note are
Nationwide flex account Visa debit card. This beats every card out there,
even specialist credit cards as it doesn't load, doesn't charge ATM fees
and is interest free (unless you're overdrawn). However you need to open a
Nationwide current account.

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