The best ways to spend your money abroad

Discover the dos and don’ts of spending money when travelling overseas

Marcus Webb – Virgin Money Living Mentor

by Marcus Webb | Independent Money Mentor

Editor of Delayed Gratification and independent journalist

It’s easy to make rookie errors when you’re on a family holiday or city break. Even the savviest of spenders can find themselves out of pocket due to a befuddling combination of language barriers, cultural differences and unfamiliar circumstances. So here are six tips on how best to spend your money when you’re abroad.

Shop around for the best exchange rate

If you’re buying foreign money, try and avoid bureaux de change at the airport and your hotel – they typically offer lousy rates. Ideally you should use a travel money comparison tool such as to order holiday cash online, but if that’s not possible you should look for high street banks in your destination. 

Play your cards right

Using credit cards abroad usually works out cheaper than withdrawing cash from ATMs. But some cards are better than others. Look for ones that don’t have cash withdrawal fees or foreign transaction fees, and when given the option always pay in the currency of the country you’re in rather than Sterling. Offering you an option in pounds might sound like they’re doing you a favour, but actually it’s a way to charge you their own vastly inflated exchange rate.

Keep your receipts

In his song Taxman George Harrison shrewdly observed that when he drove his car they taxed the street and when he tried to sit they taxed his seat. However, he did Her Majesty’s revenue collectors a disservice by failing to mention that when foreign visitors leave the UK they can claim back some of their VAT. Many countries return the favour with similar sales tax rebate schemes so it might be worth holding on to those fiddly receipts to make an application at the end of your holiday.

Consider the all-inclusive option

Whenever the pound dips down the cost of overseas travel rises. Paying upfront for all your food, drink and activities protects you against further fluctuations, and you can often get some amazing all-inclusive deals when compared to the cost of eating and drinking outside your hotel. Which is all well and good until you realise that you’re staying at a place that makes Fawlty Towers look like The Ritz and that your resort restaurant puts the bleugh into Cordon Bleu. You might want to check out online reviews before taking the plunge.

Invest in a transport pass

If you’re doing the Subway Challenge, a global competition to navigate the entire New York subway system in the shortest time possible, a transport pass will save you a lot of time and money. But even if you’re not doing something completely crazy, buying a daily or weekly transport pass will likely work out cheaper than buying individual tickets if you’re using public transport on a regular basis on holiday. And if you’re in New York and want to do something completely crazy, the time to beat is 21 hours, 28 minutes and 14 seconds. Good luck!

Avoid the tourist traps

Nothing shouts “I’m a tourist” quite like putting on a nametag and spending the day in a large group following somebody holding an umbrella high above their head. You can spare yourself tour group tyranny by taking a self-guided wander – invest in an old-fashioned print guidebook (yes, they still exist) if you don’t have roaming on your phone plan. You’ll save money, have a bit of an adventure, and see all sort of things that other visitors won’t see. Speaking of tourist traps, keep an eye out for overpriced airport express trains. In many cities you’ll find far cheaper alternatives if you do a bit of searching, and sometimes they’re even faster than the extortionate alternative.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.