Travellers Cheques versus Cash


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When you are choosing what type of currency to use when travelling overseas you may find yourself a little confused by the different options.

For example if you don't want to use your Credit or Debit Card, would you be better off getting travellers cheques, changing for cash of the appropriate currency or taking cash in your currency and exchanging it once there?

Travellers Cheques

If you want to go for an option which provides replacements when lost or stolen then choosing Travellers Cheques could be for you. As long as you make a note of your travellers cheque numbers and keep them separate in a safe place you can contact your traveller cheque provider, report yours lost or stolen and request replacements to be sent. Be aware though that this could take a few days and also that you need to report your cheques lost or stolen immediately as to prevent them being used illegally.

With regards to commission, you could see charges for around 6% but for a more competitive rate you would expect to be paying around 1% to 2% with a minimum charges of around £2 and £4. You may also be charged commission when you change the travellers cheques into currency too and so in effect you will be paying 2 lots of commission changing your currency into another. There are places which offer 0% commission rates both here, online and overseas, but always look and consider if the exchange rate offered is also competitive as otherwise it may not actually be worth while.
Another point to consider is if you have unused travellers cheques will you be able to convert them back into Sterling with no commission charged?

When looking for exchange rates this is quite straight forward but you should look to consider what the current exchange rate is, so you know what to aim for.
Also before you travel it is a wise idea to check the where you are travelling to does actually accept Sterling Travellers Cheques as countries which are developing may actually only accept US Dollar Traveller Cheques if any at all. If you are travelling to a country where all Travellers Cheques are accepted then taking Sterling Travellers Cheques are usually the best option as if you don't use them all you will be changing them back into Sterling in the UK.

Exchanging Cash

Commission and Exchange rates still do apply when looking to change into cash and the charges can be very similar so again you do need to shop around and consider all the options offered. However, if you do not exchange all your cash and don't need to then when you return home you have no need to make any more exchanges and obviously this will reduce on possible charges.

When travelling with cash though there are a number of websites and currency exchange providers who will offer better rates for pre ordered cash. The issue with this is if the rate improves before your departure date you could still in fact lose out, but if the rate falls you could be quids in. This is a risk you need to consider and the choice is very much yours. Also some exchange rate providers will offer better rates for the more money you change so if there is a group of your travelling together it might be a good idea to put all your spending money together when you take it to be converted.

The obvious big risk with cash is that it is not as safe as travellers cheques and if it is lost or stolen it will not be replaced, but the plus point is it is more likely to be easy to exchange and more places will probably offer this facility when you are actually abroad.

For more information on exchanging cash and where and when to do it, read our guide to Exchanging Cash.

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