Taking your holiday money to America

Payment CardsAlthough you might expect America to be just like a version of England it turns out that it’s very different in a number of areas, notably in terms of financial sophistication.

One very important point to note from the outset is that foreign exchange is not something that American banks generally deal with. Whilst in England you can change foreign currency in any bank, you can only do that in the largest of branches in America. Also worth noting is that ATMs aren’t as common in America as they are in the UK and you won’t be able to use a cash-back facility so it’s worth carrying, say, $100 in cash.

That lack of foreign exchange facilities means that you must take cash in American dollars. These come in $1, $5, $10, $20, $50 and $100 notes (“bills”) with each one being the same shape, size and colour so you need to look at the amount printed on them. You do get used to that lack of difference quite quickly. The dollar is divided into 100 cents and these come in 25c (“quarter”), 10c (“dime”), 5c (“nickel”) and 1c pieces. There are $1 coins but these are very unpopular and hence rare. It’s handy to take about $100 in cash (preferably in a mix of 10s and 20s); this is available commission (but not charge) free at the Post Office. The downside of cash is that if it’s stolen, it’s gone as holiday insurance rarely covers cash to any significant amount so if you are taking it, limit the amount to $100 or so. If you buy foreign currency on a card, it counts as a cash advance with all the charges that implies.

Travellers cheques (or, in America, “travelers checks”) are much better than cash in that they can be replaced fairly easily if stolen (keep a note of the numbers, date bought and where you bought them). However, they are equally expensive to purchase and there is often a charge to cash them too. In America you can use dollar cheques as though they were cash in shops (even where they say “no checks accepted”). If you have any left over after your holiday, keep them rather than cash them in your bank as you can use them later (there is no expiry date) and this will save you paying the commission again. If you buy travellers cheques on a card, it counts as a cash advance with all the charges that implies. Make sure that your travellers cheques come with the Visa or Mastercard or American Express brands as others may not be accepted.

Credit/Charge cards are used nearly everywhere these days. If you don’t have a card already, you should get one (Visa or Mastercard) even if you only plan to use it for emergencies. Bear in mind that not everywhere accepts them though and also that not all places take both Visa and Mastercard. If pushed, you can get cash on these cards either in an ATM or over the counter in a bank but save this for emergencies only as you’ll get charged a cash advance fee, currency conversion fee and interest. The exchange rate used is much better than you’ll get for either cash or travellers cheques. You will need a credit or charge card to hire a car and to reserve hotel rooms.

Debit cards are almost always branded Visa/Electron/Plus or Mastercard/Maestro/Cirrus and work in the corresponding systems however sometimes you may be issued with a card which can only be used in your own country: check that one of the Visa/Electron/Plus or Mastercard/Maestro/Cirrus symbols are on your card as if they aren’t you probably can’t use the card internationally. Charges are as per credit cards except that you don’t get charged interest on cash advances.

Cash cards are often limited to the country in which they are issued but if they have a Plus or Cirrus symbol on them, you can use them abroad too. Charges are usually the same as for debit cards in ATMs. The principle advantage of having a cash card is that they are a lot less attractive for thieves as they can’t be used without the PIN.

Prepaid cards are becoming increasingly popular with CaxtonFX and FairFX offering excellent value. Both offer cards denominated in dollars, euros and sterling. For travel to America take either the dollar or the sterling cards. Charges on both are broadly similar with Caxton taking a £10 charge (refunded) upfront and having a minimum top-up of £100 whilst FairFX charges a non-refundable £9.95 (but free by clicking on the link here) and have a minimum top-up of £10.

As well as the above options you also have a choice of providers of the various methods of payment. Travellers cheques may be offered “commission free” by your bank (and the UK Post Office), although note that this is not the same as “free”.

If you use one of the banks within the Global Alliance banks (BNPParibas, Bank of Nova Scotia, Bank of America, Barclays, Deutsche Bank and Westpac) you can use machines from one of the other Global Alliance banks without transaction charges (currency conversion fees still apply).

This article is part of our series on holiday planning which covers things like how to book your holiday, how to take your holiday money, what to pack, etc.


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