Money is the most important factor to consider once you have decided
to take a gap year. You will probably have had to work to save up before
you go, and if going on a structured programme you may find that the organisation
will provide you with some support in helping you raise the necessary.
If your gap year is to take you abroad you will most
certainly have to deal in some way with foreign exchange. For some this
may be your first time having to deal with foreign currency and it can
appear daunting. We have produced this guide with help from the British
Bankers’ Association below to help explain some of the terms used
and options available for taking travel money abroad.
• Should I take foreign money, traveller’s
cheques or credit/debit cards abroad?
• Should I take sterling traveller’s cheques or currency traveller’s
cheques abroad?
• What is the cheapest way to take money abroad?
• Where do I buy my traveller’s cheques and foreign currency?
• Where do I exchange my traveller’s cheques while abroad?
• What happens if I lose my traveller’s cheques?
• Which will offer the best exchange rate: banks, bureaux de change,
shops or hotels?
• Why can’t I just cash my own cheques abroad?
• What about Eurocheques?
• The exchange rate I’m offered when I buy (or sell) foreign
currency isn’t the same as the one published in the daily press.
Why?
• If I use my credit card abroad the transaction often takes quite
a long time to reach my account. Is there a danger of getting a worse
exchange rate than the day I used my card?
• If I have foreign currency or traveller’s cheques left when
I return to the UK, what do I do?
Should I take foreign money, traveller’s
cheques or plastic cards on holiday abroad?
• Probably all three. As a general rule, some cash is needed for
sundry purposes such as food, drink and local travel as soon as you arrive.
If you intend to buy expensive items, or are staying for more than just
a couple of days, travellers cheques are a safe way of taking money with
you. They can be cashed at banks, hotels and bureaux de change. If they
are lost or stolen, you can claim from the issuer. Credit cards and increasingly
debit cards are accepted abroad, but check with your bank before you go.
Acceptability varies from country to country and from region to region.
Should I take sterling traveller’s cheques
or currency travellers cheques on holiday?
• It depends on your destination. In most large towns and cities,
sterling travellers cheques will be willingly accepted, but in some rural
areas which may be away from the main tourist track, they are unwilling
to do so. If you are travelling to the USA or some other countries, it
may be advisable to take US dollar travellers cheques. Ask your bank or
travel agent for advice.
What is the cheapest way to take money on holiday?
• Again, it depends on your spending pattern. There will undoubtedly
be a cost in converting sterling to a foreign currency whether this is
done in the UK or abroad, but unused sterling traveller’s cheques
can be paid back into your bank account or exchanged for cash when you
return at no extra charge. Foreign money and foreign currency traveller’s
cheques may attract a higher rate of commission when you buy them and
further commission may be charged on any unused cheques or foreign money
when you want to convert them back to sterling. There will also be a potential
loss (or gain) on the difference in exchange rates. Local currency can
often be drawn from cash machines abroad using your debit card or credit
card, but if you use your credit card this will probably be counted as
a cash withdrawal and attract a charge accordingly. There may also be
a handling charge made.
Where do I buy my travellers cheques
and foreign currency?
• A bank, a bureau de change or online
where it can be delivered straight to your door.
Where do I exchange my traveller’s cheques
when I'm abroad?
• Bureaux de change, banks, hotels, shops, but do compare exchange
rates and commission charged.
What do I do if I lose my traveller’s cheques?
• Each traveller's cheque has a unique serial number, and you'll
be asked to sign each one when you buy them. When you exchange them for
cash you'll have to sign for them again, and show your passport. If your
traveller's cheques go missing then you can phone the company that sold
them to you (they should provide you with an emergency phone number) and
quote the serial number of the missing cheques. Obviously you need to
keep the receipts showing the serial numbers of the cheques and quote
them. Keep these numbers in a separate place from the cheques themselves!
Which will offer the best exchange rate: banks,
bureaux de change, shops or hotels?
• This can vary. Shop around for the best deal.
Why can't I just cash my own cheque abroad?
• Many banks abroad, particularly in the more popular tourist areas,
will cash your own cheque if it is supported by a valid cheque guarantee
card. You may however be charged a higher commission by the bank cashing
it. Check with your bank before you go, but we would recommend that you
take currency, traveller’s cheques or a credit or debit card as
well.
What about Eurocheques?
• These have now been withdrawn.
The exchange rate I'm offered when I buy (or
sell) foreign currency isn't the same as the one published in the daily
press. Why?
• Exchange rates are continually fluctuating according to wholesale
market movements. There is no ‘official' rate of exchange for any
particular currency and different organisations will offer different rates
for handling travellers cheques and currency.
• Make sure you check on the total cost of the transaction though
- you may find that an attractive exchange rate is offset by higher commission
charges.
If I use my credit card abroad the transaction
often takes quite a long time to reach my account. Is there a danger of
getting a worse exchange rate that the day I used my card?
• Your credit card company will use the rate applicable on the day
they receive the transaction from abroad. This will often be different
to the exchange rate on the day you used your card. The rate could be
better or worse depending on market movements.
If I have any foreign currency or travellers
cheques left when I return to the UK, what do I do?
• While there is nothing to stop you holding on to them until the
next time you travel, most people would prefer to change foreign currency
back into sterling. Try to have only paper money left over, as many banks
and bureaux de change will either not accept coin or will offer a very
poor exchange rate for it. The money will be converted at the exchange
rate applicable to that day and could be worse (or better) than the rate
when you bought it.
