Easy ways to make money for kids

Whether youre going abroad, or want to buy on foreign websites, you can save 100s by using specialist travel spending cards that give you the best possible exchange rates.

This is a step by step guide to the latest best buy credit and prepaid cards, how to compare currencies using the free Travel Money Maximiser – and a crucial warning for Halifax, RBS, NatWest, Santander or Lloyds TSB Debit card holders.

Speedily find your cheapest solution

The cheapest way to spend abroad, depends on when and where youre going, your credit rating and more. Our unique Currency Power Picker swiftly finds your cheapest path.

Are you going abroad in the next four weeks?

There’s no time to get a new special credit card, so it’s between using existing debit/credit cards, getting foreign currency, or using prepaid cards. To find out which, answer the next question…

. Do you bank with Nationwide, or have a Nwide, Post Office, Saga or Santander Zero credit card?

Congratulations. If you have a Nationwide Flexaccount (with a debit card) or one of these specific credit cards, you’re already holstering one of the very cheapest ways to spend abroad.

Do be careful with the Santander card though, you specifically need the Santander Zero credit card, not any Santander card. To find out why and how best to use it, read the Cheapest Cards for Overseas Spending section.

If your destination is unlikely to accept cards, or you would like a little cash just in case, read the Cheapest Travel Money section which includes a free tool to get the best deal

Using your existing, non-specialised plastic could be very expensive. To find out your best route, answer the next question….

. Do you plan to use a Lloyds TSB, Halifax, RBS, IF, Santander or NatWest Debit card abroad?

Do not use these cards! Be very careful, these are the overseas spending CARDS FROM HELL. Not only do they charge everything a normal credit or debit card does, they add an extra spending penalty of around 1 each time you use them. Avoid them at all costs. For more on this read the overseas cards from hell section.

But dont panic, theres still a simple solution. You have three options, and the difference between them is relatively small…

• Get travel money before you go.

  Read the Cheapest Travel Money section which includes a free tool to compare the top exchange rates.

• Get a special prepaid card for added security.

  To avoid carrying wads of cash, Prepaid cards can be acquired much quicker than credit cards. You load cash on, then use it in shops and restaurants just like a debit or credit card. They also offer security advantages over cash; if the card is lost or stolen, the whole balance will be refunded safely to you, minus a fee of around 10. However, you can only spend in Euros or US Dollars on one. Read the Best Prepaid Cards section.

• Use your existing plastic.

  Using your existing debit card (barring those above) or a credit card, which is paid off in full at the end of the month so there’s no interest, isn’t particularly expensive.

  If you’re going to do it, the best way is to pay for things on the card, rather than taking cash out of a machine and spending that, as then you avoid the fees both debit and credit cards charge for withdrawing cash abroad. If you are going to withdraw cash, then fewer, bigger transactions is cheaper than lots of little ones.

Back

Here you have three options, and the difference between them is relatively small…

• Get travel money before you go.

  Read the Cheapest Travel Money section which includes a free tool to compare the top exchange rates.

• Get a special prepaid card for added security.

  To avoid carrying wads of cash, Prepaid cards can be acquired much quicker than credit cards. You load cash on, then use it in shops and restaurants just like a debit or credit card. They also offer security advantages over cash; if the card is lost or stolen, the whole balance will be refunded safely to you, minus a fee of around 10. However, you can only spend in Euros or US Dollars on one. Read the Best Prepaid Cards section.

• Use your existing plastic.

  Using your existing debit card (barring those above) or a credit card, which is paid off in full at the end of the month so there’s no interest, isn’t particularly expensive.

  If you’re going to do it, the best way is to pay for things on the card, rather than taking cash ouit of a machine and spending that, as then you avoid the fees both debit and credit cards charge for withdrawing cash abroad. If you are going to withdraw cash, then fewer, bigger transactions is cheaper than lots of little ones.

You have enough time to apply for new, specialised plastic. To find if thats the right option for you, answer the next question…

. Do you bank with Nationwide or have a Nwide, Post Office, Saga or Santander Zero credit cards?

Congratulations. If you have a Nationwide Flexaccount (with a debit card) or one of these specific credit cards, you’re already holstering one of the very cheapest ways to spend abroad.

Do be careful with the Santander card though, you specifically need the Santander Zero credit card, not any Santander card. To find out why and how best to use it, read the Cheapest Cards for Overseas Spending section.

If your destination is unlikely to accept cards, or you would like a little cash just in case, read the Cheapest Travel Money section which includes a free tool to get the best deal

In that case, your existing plastic (if you have any!) can be improved upon, so answer the next question.

. Do you have a decent credit rating?

If you don’t usually have problems being accepted for new cards as you’ve a decent credit rating, then grab one of the best cards for spending overseas. This will substantially cut your costs every time you’re abroad.

If you’re going to a destination which is unlikely to accept cards, or you would like a little cash just in case, read the Cheapest Travel Money section which includes a free tool to get the best deal.

If you’ve had applications for credit turned down in the past year (e.g. for credit cards/mortgage/mobile phone contracts) then it’s likely you’ll be rejected when applying for one of these cards (read more about credit ratings). To find your cheapest currency system, answer the next question…

. Do you plan to use a Lloyds TSB, Halifax, RBS, IF, Santander or NatWest DEBIT card abroad?

Do not use these cards! Be very careful, these are the overseas spending CARDS FROM HELL. Not only do they charge everything a normal credit or debit card does, they add an extra spending penalty of around 1 each time you use them. Avoid them at all costs. For more on this read the overseas cards from hell section.

But dont panic, theres still a simple solution. You have three options, and the difference between them is relatively small…

• Get travel money before you go.

  Read the Cheapest Travel Money section which includes a free tool to compare the top exchange rates.

• Specialist prepaid cards don’t do a credit check.

  To avoid carrying wads of cash, Prepaid cards can be acquired much quicker than credit cards. You load cash on, then use it in shops and restaurants just like a debit or credit card. They also offer security advantages over cash; if the card is lost or stolen, the whole balance will be refunded safely to you, minus a fee of around 10. However, you can only spend in Euros or US Dollars on one. Read the Best Prepaid Cards section

• Use your existing plastic.

  Using your existing debit card (barring those above) or a credit card, which is paid off in full at the end of the month so there’s no interest, isn’t particularly expensive.

  If you’re going to do it, the best way is to pay for things on the card, rather than taking cash ouit of a machine and spending that, as then you avoid the fees both debit and credit cards charge for withdrawing cash abroad. If you are going to withdraw cash, then fewer, bigger transactions is cheaper than lots of little ones.

Here you have three options, and the difference between them is relatively small…

• Get travel money before you go.

  Read the Cheapest Travel Money section which includes a free tool to compare the top exchange rates.

• Specialist prepaid cards don’t do a credit check.

  To avoid carrying wads of cash, Prepaid cards can be acquired much quicker than credit cards. You load cash on, then use it in shops and restaurants just like a debit or credit card. They also offer security advantages over cash; if the card is lost or stolen, the whole balance will be refunded safely to you, minus a fee of around 10. However, you can only spend in Euros or US Dollars on one. Read the Best Prepaid Cards section

• Use your existing plastic.

  Using your existing debit card (barring those above) or a credit card, which is paid off in full at the end of the month so there’s no interest, isn’t particularly expensive.

  If you’re going to do it, the best way is to pay for things on the card, rather than taking cash ouit of a machine and spending that, as then you avoid the fees both debit and credit cards charge for withdrawing cash abroad. If you are going to withdraw cash, then fewer, bigger transactions is cheaper than lots of little ones.

The top cards for overseas spending

Use your plastic overseas and you could be hit by a thwack of hidden charges. This includes:

• Adding a ‘load’ on the exchange rate so 100 of foreign currency actually costs you 103

• Cash withdrawal fees on both credit and debit cards

• Interest charges even if you pay off in full

• Some even charge a penalty each time you spend.

For details of all costs read the full hidden holiday spending charges note.

The specialist overseas credit cards

Four credit cards avoid most hidden charges and push themselves as specialist overseas plastic, hoping youll also use them in the UK where theyre not so competitive. Simply get one only for overseas spending and you beat the system (see Martin’s Overseas Wallet blog).

However, even on these cards there’s a trap, so always follow the golden rule.

Set up a Direct Debit to repay in full every month,
or the interest charges dwarf the cheap currency gains.

On these cards, it’s far cheaper to spend on them than withdraw cash and spend it.

Top for Over 50s: Saga Platinum Worldwide 0% load & no interest on cash withdrawals.

If you’re over 50, you can get a Saga* card which has no foreign exchange loading anywhere, so you get the best possible exchange rate.

It does charge an ATM fee of 2% (min 2); though a big plus here is that it charges no interest on cash withdrawals if you do repay in full. Many credit cards charge hefty interest of up to 25-30% on cash withdrawn, even if you clear the balance at the end of the month.

If you make multiple cash withdrawals while away, this can be beaten by the Santander Zero card (see below). However, you have to go into a branch to get one of those (Santander customers can get it online).

Top open-to-all online: Post Office Worldwide 0% load, available via web.

For Santander bank account/mortgage customers, or those happy to apply in branches, its Zero card beats this (see below).

The Post Office* credit card has no foreign exchange loading anywhere, so you get the best possible exchange rate at all times.

It does charge a 2.5% fee (minimum 3) for cash machine withdrawals though, so Santander Zero beats it if you’ll be taking cash out while abroad. However, anyone can apply for one online, making it more accessible for non-Santander customers.

As it’s such a strong contender, it’s very unlikely to be worth becoming a Santander bank account customer to get the Zero card instead of this one, especially as every application you do has a minor impact on your credit score.

The Cheapest Card (branch only): Santander Zero Worldwide 0% load & ATM withdrawals.

The Santander Zero card has no foreign exchange loading anywhere, so you get the best possible exchange rate, and uniquely it doesn’t charge a fee for withdrawing cash.

However, you can only apply for this in Santander branches, unless you already have a current account or mortgage with them, when you can then apply online.

The only negative is its high 27.9% cash withdrawal interest rate, which you pay even if you clear the card in full. Yet as thats roughly 2 for a month per 100, it’s still cheaper than paying interest PLUS the cash withdrawal fees on other cards.

This card also has a decent balance transfer offer; 0% for twelve months with a 3% fee. However, if you’re using it for spending abroad, don’t do a balance transfer too, as this can end up costing you big.

Finally, the terms and conditions mention a 10 dormancy fee if the card’s not used for 6 months, although Santander tells us it’s yet to charge anyone this fee, it’s best to use the card a couple of times a year just in case.

Top Card with ‘Perks’: Nationwide 0% load in Europe, plus extended warranties/protection

If you never travel outside of Europe, Nationwide* is a good option. It’s fees-free for European travel, though charges 1% for worldwide purchases, and a 2.5% cash withdrawal fee everywhere.

However its big bonus is the fringe benefit of a year’s extended warranty & purchase protection on UK-bought electricals see the full Credit Card Perks guide for more info.

The Top Debit Card

This is just a touch more fiddly, as to use these abroad you have to set up a new current account, then pre-load it with the cash you intend to spend while overseas.

Top Debit Card: Nationwide 0% load in Europe, no cash withdrawal fees

The only card of note is Nationwide’s Flexaccount Visa Debit card. For European spending, this beats every card out there, even pipping the specialist credit cards.

It doesn’t charge a load fee in Europe, but does charge 1% worldwide. There’s no charge for using ATMs (apart from the load fee mentioned above) and withdrawing cash is interest free (unless youre overdrawn). However, to get the debit card you need Nationwide’s bank account, and while it isn’t bad, it’s not the best buy (see the Bank Accounts guide).

Nationwide wants you use this as your main current account, yet you can sneakily avoid this by setting up a free savings account at the same time as opening the Flexaccount; its e-savings plus* account can be opened with just 1. Then you can just preload the Flexaccount for spending before travelling abroad.

Then again, there is one other reason to stick with a credit card rather than debit card overseas, thanks to Section 75 consumer protection. Read the full article on Section 75 protection.

Getting the cheapest foreign cash

Dont ever think that commission free automatically makes it a winner, if you want to get the best deal for spending overseas, it involves a combination of the best exchange rate and the lowest commission (read more on commission versus rate ).

To cut through this, weve built a special daily updated free website at TravelMoneyMax.com. It whizzes to all the main online bureaux de change to compare who’ll give you the most foreign cash, incorporating commission charges and rates for every country.

TravelMoneyMax.com can only search companies with an online presence, luckily though these usually undercut their high street competitors. Its occasionally possible to get a better rate at some local specialist dealers. Yet this is rare and theyre only located in areas with large amounts of overseas visitors where competition on rates is very high, such as Bayswater in West London.

If you live near these it’s worth checking them out; if they do start websites and delivering currency, they’ll be added to TravelMoneyMax.com.

Beware when paying on credit OR debit cards!

Sadly, buying currency from a bureau de change in the UK on a credit or debit card isnt always treated as a UK transaction. All credit cards and some debit cards charge an additional fee on top of what you pay the bureau de change. See a full list of cards that charge.

The cards that charge…

• All Credit Cards.

  All credit cards charge a fee of around 2.5% (minimum 3) when you buy foreign currency; it’s treated like withdrawing cash from an ATM. In addition, you could be charged interest from the day you make the purchase, even if it’s repaid in full at the end of the month. See a full table of charges

• Visa Debit cards.

  If you have one of the following debit cards, you’ll be charged a 2%-ish fee. The banks that charge issue ‘Visa Debit’ (previously Delta) cards, though that doesnt mean every Visa Debit card charges.

Got a card that charges?

There are a number of options…

• Use a different card if possible. This is the simple option.

• With debit cards withdraw cash and pay with that.

  Take the money out of a UK cash machin with a debit card and use that to pay at a high street bureau de change and you’ll avoid the fee, though check the gain isn’t defeated by a worse rate.

• Spend on the card itself.

  With most of the cards you’re likely to be better off by just spending on it while overseas, than buying foreign cash with it.

  The big exceptions are Lloyds and Santander debit cards, which if you spend on them abroad will slap ANOTHER charge on top every time you spend in a shop, as well as the normal foreign currency fees – these are the DOUBLE cards from hell.

Pick it up at the airport, but always pre-order

The worst place to exchange money is the airport. Dont assume youll get the same rate there as at a bureau de changes high street branch or online quote, it’s usually much worse.

The best thing to do if you want the convenience of airport pickup, is order it online first and then ask to collect it at the airport, you get a much better rate.

Prepaid cards for added security

Prepaid cards do exactly what they say on the tin; you load cash onto one, and then it can be used in shops and restaurants just like a debit or credit card.

While not quite as cheap as the specialist credit or debit cards, the vast majority are accepted by most shops which take the Maestro network (the substantial bulk) both in the UK and abroad.

Their big advantage over cash is if you lose your card, for a fee of around 10 most providers will replace it, with all the funds in tact. Lose a wallet of Dollar bills in Times Square and it’s gone for good.

Prepaid cards have a variety of different charges, but the two top cards keep these to a minimum. More Info: Prepaid Card Fees

The Cheapest Overall: FairFx. No spending or ‘load’ fees, plus free 5 bonus

The FairFX* prepaid card, which must be applied for online, charges no spending or foreign ‘loading’ fees, and can be topped up for free by debit card or bank transfer.

Apply via its own website and there’s a 9.95 application fee, but the link above takes you through comparison site Moneysupermarket, meaning the fee is waived provided you load more than 10/$20.

Currently if you top-up at least 500 when opening, it’ll boost the amount you load by 5. This bonus means the overall exchange rate challenges the top credit cards for overseas spending. When we compared the rates, the method that gave the most bang for your buck changed daily.

However, with FairFx it’s the rate on the day you load up, not spend that counts. So if the pound strengthens after you load the card, you will lose out. Though conversely if it weakens you’d gain.

The only cost is 1.50/$2 to withdraw cash from an ATM, less than most credit or debit cards. You get FairFx’s own exchange rate, which changes daily but generally beats the other prepaid cards and cash rates (compare it with TravelMoneyMax.com’s best).

The next cheapest: CaxtonFx. No spending or load fees, but slightly worse exchange rate.

Next best is Caxton FX*, again available online, which also has no spending or foreign load fees and can be topped up online or over the phone for free by debit card. You get Caxton’s exchange rate, which is usually worse than FairFX but beats the best youd get for cash.

The minimum amount of foreign currency you can load up the card with is 100/150/$200, and there’s no ATM withdrawal charge outside the UK.

Travelex Cash Passport. If you need a card quick

Not far behind is the foreign exchange giant Travelexs Cash Passport. There’s no fee for spending abroad, but it does charge 2% when you top up online, by phone or in stores.

Youll get the prevailing Travelex exchange rate, generally not as good as FairFX/Caxton, and the exchange rates you get on the best credit and debit cards.

The big boon over the above cards is it’s available at Travelex branches, plus Thomas Cook and Co-op Travel agents, meaning you can get one mega quick if your holiday is soon, though buy there and you can only then top-up in branches (where you’ll be charged that shop’s commission) or by bank transfer .

It charges a 2 monthly charge if the card goes unused for twelve months. If youre heading towards that situation, simply cancel the card as its rarely worth it.

The Debit and Credit cards from hell

While the right card is absolutely the best way to spend abroad, the wrong one is absolutely the worst way.

Use most plastic overseas and you could be hit by a thwack of hidden charges. This includes a load on the exchange rate so 100 of foreign currency costs you 103; cash withdrawal fees on both credit and debit cards; as well interest charges even if you pay off in full. More info: Read the full hidden holiday spending charges note.

These are bad enough, yet six specific debit cards have yet another fee, so they’re my cards from hell. Let’s make this plain do not use the following cards for spending overseas; any of the methods above beat them.

Halifax Debit Card
Spending penalty: 1.50. Exchange load: 2.75%. Cash Withdrawal fee: 1.50

Lloyds Debit Card
Spending penalty: 1. Exchange load: 2.99%. Cash Withdrawal: 1.5% min 2 max 4.50

IF Debit Card
Spending penalty: 1.50 Exchange load: 2.25%. Cash Withdrawal fee: 1.50 or 1.5%

RBS Debit Card
Spending penalty: 1.25. Exchange load: 2.75%. Cash Withdrawal fee: 2% min 2 max 5

NatWest Debit Card
Spending penalty: 1.25. Exchange load: 2.75%. Cash Withdrawal fee: 2% min 2 max 5

Santander Debit Card
Spending penalty: 1.25. Exchange load: 2.75%. Cash Withdrawal fee: 1.5% min 1.99

Full list of charges for major UK credit and debit cards.

When it comes to credit cards, the ones from hell are simple

Any credit card which youre not paying off in full, is a nightmare and will cost you serious cash.

If you cant pay it off in full, choose based on the lowest interest rate for spending, not the cheapest overseas card.

Currency Q&A

A. Theres no right answer to this, which is why this guide focuses on how to get the best rate at any moment. If the pound is strong and the Euro or Dollar weak, many people think, “Im not going away for a few months, but Ill grab my cash now.”. If the pound’s weak, many want to hold off.

Theres nothing wrong with doing this, but you need to understand it’s currency speculation and youre effectively gambling on exchange rate moves.

The fact the pound is strong at any time doesnt mean it wont get stronger and therefore buying your currency early can lose you money. Conversely, the fact it’s weak doesn’t mean it won’t get weaker. Playing the currency market is something highly paid traders in the City cant always get right. Those that do make a fortune; those that dont, lose it.

A. Absolutely, youll tend to pay the same costs on foreign websites as if you were actually abroad and spending there. If youre paying in a foreign currency all the usual charges apply the same cheap cards are cheap, the same expensive ones costly.

A. No. This is called dynamic currency exchange, and should be avoided. Often the rate you get will be appalling and someones making big money out of it. If youve got one of the specialist overseas cards youll get a much better rate paying in the foreign currency not pounds. And even if youre using a normal card as youve no idea of the relative exchange rates they could be playing you for a fool; so it’s always best to stick with paying in the foreign currency.

If you’re travelling to Spain, watch out for this when withdrawing money from cash machines too. You will often be asked if you want to have your money converted into Sterling when withdrawing Euros from ATMs. The general rule is say no as you could get a worse rate than the one youd be given by your own plastic provider.

Yet a few machines now tell you the commission/load they add to the currency, if this is less than your card’s own load (eg it’s 2.5% and your card is 2.75%) do opt to pay in pounds. However if you have one of the special cheap travel cards, theyre always unbeatable so select euros.

A. If youre going to get the cash out on a specialist overseas card, then it’s better to wait until youre there.

However, if youre just planning to use a normal card or convert pounds when youre out there, theres no guarantee youll get a better rate and certainly changing in most hotels is normally a bad idea as they give poor rates. Overall it’s safer to use the Travel Money Maximiser and get the cheapest rate while youre here.

A. If youre going to get the cash out on a specialist overseas card, then it’s better to wait until youre there.

However, if youre just planning to use a normal card or convert pounds when youre out there, theres no guarantee youll get a better rate and certainly changing in most hotels is normally a bad idea as they give poor rates. Overall it’s safer to use the Travel Money Maximiser and get the cheapest rate while youre here.

Spend 1,000 in a year and withdraw 750 worth in cash using a Halifax debit card and the total fees/charges are over 120. With Santander’s credit card it’s just 16 while Nationwide’s debit card doesn’t charge in Europe and is 8.40 elsewhere.