If you are planning on going abroad for a holiday this year, you may not have thought too much about your currency options yet. It is however an important consideration as failing to choose the best currency rate may leave you significantly out of pocket. We shall explore some of the options available and help you decide what is likely to be best for you.
Of all options, cash is definitely the most obvious and benefits from being the most widely accepted of all payment methods. It certainly is not a desirable option though, as purchasing cash is very expensive. In addition there is no protection or insurance offered against loss or theft, and so when abroad you should keep the amount you carry on your person to a minimum.
Travellers cheques, while often seen as a thing of the past, are still a valid payment option. The main advantage is security, as lost or stolen cheques can be replaced by the issuing institution, and fees are usually fairly low in comparison to other options. However, very few retailers accept travellers cheques nowadays and most people would prefer not to spend their holiday queuing at a bank to exchange their cheques for cash.
Credit cards seem to have replaced travellers cheques as the most commonly used currency option. The vast majority of shops accept standard credit cards, even in the most remote places, and no extra effort is required as most people will already have a credit card of some sort. Their security also offers peace of mind. The fact that the card offers a credit facility may be seen as plus point, but many a holidaymaker has returned home cursing the fact that they have overspent and will have to work extra hard to pay off their holiday excess. The excessive fees charged also make credit cards a poor option.
The debit card is very similar to the credit card. Benefits offered are almost identical save for the credit facility, but higher withdrawal charges and slightly less acceptability make the debit card a less appealing option.
The prepaid currency card combines elements of all previously mentioned options and is by far the best for the average holidaymaker. Like credit and debit cards they offer security and convenience, but at a fraction of the cost as fees are lower and a better exchange rate than cash is offered. In addition, you are unable to overspend as the card is loaded with an amount determined by yourself before you depart.
In conclusion, the prepaid currency card is the best option to choose when looking for the best currency rate. While many other options are available, they are probably best used as a back up only and by using a prepaid card you are safe in the knowledge that you will not spend any more than you have budgeted for.
Tom Fisher.
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