Koko Sarkari, chief operating officer of one of the world’s leading travel money providers ICE, answers a few of the frequently asked questions about holiday money.
What is the best way to take money abroad for holidays? Is cash always best?
We suggest that travellers take enough local currency to pay for drinks, ice lollies, tips, taxis and so on, then consider putting the rest of their holiday spending money on a prepaid currency card such as the ICE Travellers Cashcard or use a credit card but be aware of exchange rates applied and charges for overseas use. By taking a mixture of payment methods you’re not putting all your eggs in one basket and will have greater security than carrying cash alone.
Getting a good deal on currency should be a top priority for travellers wherever they go and by combining a number of options from pre-ordered travel money cash, loading currency onto prepaid cards, or using a credit card that’s free of overseas charges, travellers can take advantage of convenient payment options and competitive rates of exchange.
Is there a safer way than cash?
A PIN-protected prepaid currency card can offer greater security than carrying cash, allowing cardholders to travel light along with some coins and notes just for tips and small transactions. Not only will it help safeguard against fraud, but also assists holidaymakers with budgeting as you can only spend what’s on the card. An additional benefit of a prepaid currency card is that the rate of exchange will stay fixed at the time you loaded money to the card. Unsurprisingly we saw loads to the ICE Travellers Cashcard in Euros jump 23% at the start of the year as the Euro weakened against the Pound. Some providers such as ICE offer a free backup card in case the first card is lost or stolen. Also look out for cashback offers.
Where is the best place to get the best deal for my money?
A bit of planning both in terms of ordering travel money and methods of payment overseas can help make budgets go that bit further. Online rates tend to be more competitive than the high street but shop around and compare. Remember to factor in postage costs if you are having money delivered to home.
Some travel money providers offer special Click & Collect deals from their branches, so it is worth checking these out too.
If it’s advertised that there’s “no commission”, do customers pay for it on a poor exchange rate, especially when changing money back on return from holidays?
The exchange rate market is highly competitive and travellers now have a whole host of ways to access travel money at great rates. Generally commission charges don’t apply to travel money orders online but may apply in some locations such as airports due to higher operating costs. The best idea is for travellers to shop around and plan ahead.
Changing money back at the end of the holiday can be a source of frustration for holidaymakers. ICE has recognised this and offers a free 7 day same rate buy-back guarantee on the ICE Travellers Cashcard– funds can be converted back to sterling at the same exchange rate as the last load (as stipulated by the Terms and Conditions). If customers have purchased travel money from iceplc.com online or over the phone ICE will buy back leftover notes up to £300.
How can I get the most out of a pre-paid card?
When you apply for a prepaid currency card, be careful to check the Terms and Conditions. Many prepaid cards have charges that apply for their use and savings made on the rate of exchange could be lost through unexpected fees. However the ICE Travellers Cashcard for example is the only currency card on the market offering a 1.5% cashback on qualifying purchases.
It might be an idea to keep an eye on exchange rate movements and load the card to take advantage of favourable rates. It’s also worth thinking about loading money to the card on a regular basis rather than wait and load all in one go if you are worried about how exchange rates will move.
Generally, wherever the MasterCard® logo appears, a prepaid currency card such as the ICE Travellers Cashcard1 will be accepted. It is useful for everyday spending in shops, restaurants and bars and for withdrawing cash at ATMs. It’s just like using a credit card but you can only spend up to the amount that’s on the card.
Are there restrictions on where a prepaid currency card can be used?
In most instances you can use a prepaid card where you might have used a debit or credit card – but there are a couple of exceptions that travellers should be aware of.
Hotels and car hire companies usually create a pre-authorisation which might ‘ring-fence’ a large amount of cash on the card for security against damage to the room or car etc. This would prevent the card holder from accessing those funds for the duration of the stay – and beyond – as pre-authorisation is removed when the bill is settled, but can take 72 hours. It may therefore be preferable to use a credit or debit card for the pre-authorisation and pay the final bill with the prepaid currency card.
Some Motorway toll booths will not take prepaid cards as payment – try first but have cash as back up. Also some Train Ticket Machines won’t accept prepaid cards, so have cash at the ready if necessary. If you fancy doing some gambling, don’t rely 100% on a prepaid card as some are not accepted as payment within gambling institutions.
What are the pitfalls of just using your debit/credit card in a cash machine?
Be aware of any charges for using ATMs imposed by the card provider or the ATM operator. Also consider the exchange rate that applies. If you pay by debit or credit card, ensure the transaction is conducted in the local currency rather than sterling otherwise you could be paying more for goods/services.
And finally, are there new ways to safely and inexpensively take money abroad that our readers should know about?
No one can predict how rates will move, but a good way to hedge your bets is to load money to a prepaid card in the lead-up to a holiday. That means if the Euro starts to strengthen closer to the departure date, the rate on the card will average out at a better rate than if you had put all your eggs in one basket and bought currency just before your holiday.