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I didn't go abroad for about ten years, and I'm out of the loop regarding the impact of modern technology on travel practices. The last time I went anywhere it was de riguer to take some currency and the bulk of your money in Traveller's Cheques. I now discover that Traveller's Cheques have fallen so far out of favour that they're not accepted in many places.

I understand that most people now carry credit cards with specifically low/zero rates for use abroad instead. I do not usually carry a credit card, simply because I dislike credit. I've now applied for one but there's a substantial chance it won't arrive before my departure date.

If I don't have a credit card and don't want to get Traveller's Cheques, what's the next best option for taking currency abroad? I can use my debit card but it attracts a 2% penalty on use abroad. Are there any cheaper yet still safe options?

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    Where are you going and where are you going to stay while you're abroad? You may have problems checking in to various hotels without a credit card for example. – Berwyn Aug 11 '16 at 16:45
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    Some credit cards will also work as a debit card. Put money on the account and all payment will be taken from that money rather than as credit. Ask your bank/credit card company whether yours can work that way. For now I would use the bank card to get money out of the ATMs in the destination country. The 2% is very likely much less than checks would have cost. – Willeke Aug 11 '16 at 16:49
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    You could always just carry a load of cash. Be careful! – phoog Aug 11 '16 at 16:55
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    If there is a currency exchange involved, a 2% surcharge isn't too out of market --- for the standards in my nation, at least. Here in Italy the most common conditions are 1.75%, and I had to search for a while to find a card that didn't charge that. – Federico Poloni Aug 12 '16 at 6:52
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    Travelers checks have been on their way out and advised against by everywhere except companies that sell travellers checks for as long as I can remember - and I'm over 30! – CMaster Aug 12 '16 at 9:18
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Honestly, that 2% isn't too bad and probably your best option, but there are a few alternatives if you're interested.

ATM Card

Some banks, if not all, have cards that only do ATM withdraws. This is great from a security standpoint because if your card gets stolen it can only be accessed with your PIN. You would have to ask your bank if the ATM card is allowed to do foreign transactions, if the same fees apply and does it only work for your bank's ATM. Your bank might have to mail one to you which will take time.

VISA Travel Gift Card

Unlike the ATM card, you can load the card with money and just hold onto the card when you travel. In case it gets stolen, only the loaded funds on the card gets missing as opposed to a debit card with your name on it. Since it is not a bank issued card, you would have to check the fees for using and reloading the card. You can purchase a card in a Walmart or a chain convenience store around you.

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Your debit card is your best option

All options for moving money to another currency will cost you money, similarly to the 2% charge you incur by using your debit card. If you bring cash (which is inconvenient and risky) you'll be paying something similar (either by fees or by the exchange rate) to the money changer.

Sending money to yourself with Western Union

If the credit card doesn't arrive in time, you could send yourself money with Western Union. You send it just before departure, and collect it upon arrival at your destination. Please note that this may very well be more expensive than using your debit card. WU takes quite a lot of profit from transactions.

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There are pre-paid cards. Described by confused.com details from that site:

Prepaid cards look like debit and credit cards and come with the same chip and PIN facility so you can pay for goods and services in shops as well as using them to withdraw money from cash points. Most prepaid cards are part of either the Visa or Mastercard schemes, so they are widely accepted.

You pre-load prepaid cards with cash or by transferring money from your debit or credit card. You can pre-load most cards online or by telephoning your prepaid card provider and giving your debit or credit card details.

You can also pre-load cards at a variety of UK retail outlets including the Post Office.

Prepaid cards normally come in three currencies: US dollar, euro or sterling. If you’re travelling to a country that accepts the US dollar then you’ll need the dollar card, if you’re travelling within Europe you’ll need a euro card.

If you’re travelling outside of these areas or will be moving between different currencies, then purchase a sterling card.

They are safer than carrying cash as many providers offer emergency card or cash replacements so if you lose your prepaid card you can still continue your holiday.

Added security benefits – if your prepaid card is lost or stolen it is not linked to your bank account like your debit card, and it has no credit facility like your credit card so your exposure to fraud is limited.

They are a valuable budgeting aid as you are unable to spend over the amount you’ve loaded onto the card.

Many cards come with a companion card, meaning you can share money with friends or family anywhere in the world. And if you run out of money on your travels, family and friends in the UK can top-up your card.

Using a prepaid card avoids the inconvenience of your debit or credit card being blocked by your bank while you’re abroad due to fraud fears.

  • Is there an explanation behind this: If you’re travelling outside of these areas or will be moving between different currencies, then purchase a sterling card. or is it because you're British/living in the UK/got this information from a UK source? If your prepaid card is lost or stolen do you lose all the money on it or do you cancel it to block anyone else from access the funds? Does the card provider also look into any fraud committed with the card? I once had a fraudulent transaction put on my Visa card in another country and my bank investigated and later returned those funds. – hippietrail Aug 12 '16 at 7:14
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    @hippietrail I think that's a UK source. Better would be "If you're...moving between different currencies, get a card in your own currency". – Chris H Aug 12 '16 at 8:33
  • Note that some of these cards (denominated in your own currency) are free to withdraw from abroad (though they make money of the exchange rate) but expensive to withdraw from at home. So you have to think about when to empty them (or whether to leave the balance on the card as emergency funds firewalled from your bank account). You can of course carry the balance over to the next trip. Some also have minimum top-ups, or a fee for small top-ups. – Chris H Aug 12 '16 at 8:36
  • Yes it was all the top up fees and rules, plus the frequency with which the fees and rules change, that made me decide against getting such a card. I would be more likely to get one on a trip in which I just went to one country/used one currency. – hippietrail Aug 12 '16 at 8:52
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The 2% is not "foreign use fee", it's "currency conversion fee". If you make foreign currency operations with your card at home, you're still paying it. This 2% is on top of Visa/MasterCard exchange rates which aren't the cheapest either. There is absolutely no difference between credit and debit cards here, unless your bank deliberately introduce it. Visa and MC doesn't care if it's a credit/debit/prepaid/virtual card - they're all processed in the same way.

If your projected expenses are low or you have no time to prepare, then biting the bullet is most likely still more cost effective than effort required to getting around that 2%.

If you are traveling to a country that uses same currency as your country, then your debit card should work just like at home.

If you are traveling to a country that uses different currency than your country, then open a foreign currency account and get a debit card for it. You can use various online exchanges to top this account up and get better exchange fees than your bank or card operator could ever give you. Plus, you don't even have to put all the money upfront, because you can log in to your online banking from abroad and convert as much as you need for the next day (Depending on how fast transfers are in your country you have to plan ahead that long. Still, it beats planning entire trip ahead).

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    Visa/MC rates are normally pretty good. I'm not sure where you can get a better rate from as a consumer. – CMaster Aug 12 '16 at 9:17
  • @CMaster Revolut during weekdays for example. The strategy advised in this answer should also shave a bit off if you exchange at least a four digit sum at a time. – neo Aug 12 '16 at 9:20
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    @CMaster If you are very patient, you can use p2p exchange platform to get unbeatable rates. But pretty much every regular online exchange has no other pros than slightly lower rates. – Agent_L Aug 12 '16 at 9:28
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    @9ilsdx9rvj0lo Can you elaborate? English is not my primary language and I can't understand "split" in this context. Is it smth akin to spread? – Agent_L Aug 12 '16 at 10:01
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    @9ilsdx9rvj0lo yeah, that's what I meant when talking about exchange rates in general. – Agent_L Aug 12 '16 at 10:27

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