Top money tips

Top traveler tips for dealing with money and shopping in the U.K.

1. What kind of money do they use in the United Kingdom? The U.K. uses British pounds stirling. (The neighboring Republic of Ireland uses the euro). These days, a pound—the currency symbol looks like this: £—is worth about US$1.35 (or US$1 equals 75p). This is called the exchange rate, and the lower this number, the better off you are, since it will cost you less to buy each pound. British coins include 1p, 2p, 5p, 10p, 20p, 50p, and everybody's favorite: the thick, weighty, golden £1 coin. Bills come in denominations of £5, £10, £20, and £50. » more

2. What's the cheapest way to pay for things in the U.K? You will get a far, far better exchange rate (roughly 9%) paying by credit card than you ever will using an ATM to get cash (let's not even talk about the crummy rates you get exchanging traveler's checks or using a commercial exchange office rather than a bank). A study in 2011, showed that the exchange rate you get by using a credit card was, on average, 8.9% better than that charged by U.S. banks to get cash out of an ATM (coupled, in some case, with fees). That's like tearing up a $10 bill for every $111 withdrawn from a foreign ATM. The actual bank-by-bank numbers ranged from 4% worse than credit cards (at Northern Bank) to 14.25 worse (way to top the charts, U.S. Bank!). The only thing worse than a bank was using the exchange service Travelex (where you take a 14.7% hit). Still, not everywhere accepts credit card (and some places will give you a cash discount), so you do need to have some local cash on hand. » more

3. How can I get British pounds? The best way to get pounds is to wait until you are in the U.K. and use your home bankcard in any local British ATM, which are widespread and work just like the ones at home (see the next answer for details). Not only is this method fast and easy, but it also means you will receive the most favorable exchange rate possible. You can also change dollars or travelers checks at any bank—and at most hotels' front desks—however, you will receive fewer euros per dollar than if you use an ATM. If you are in a pinch and need to change cash or checks, always try a bank first as hotels, exchange booths, and shops that offer to change money inevitably do so at rates favorable to them, not you, and often charge commissions. » more

4. How do I use an ATM in the U.K.? The U.K. (all of Europe) is like America: there are ATM bank machines at all major airports and train stations, as well as at the banks that occupy the street corners and main squares of every town. ATMs in Britain work just like those at home. You put in your card, punch in your four-digit PIN, select how much you want, and it spits out pounds, immediately and automatically deducting the money from your home checking account. » more

5. Do I need to have pounds before I leave for the U.K.? Not really. It may help relieve a modicum of stress on the day you arrive—since otherwise your first order of business upon arrival will probably be to find an ATM in the airport—but it isn't necessary. You can buy pounds from major branches of U.S. banks (if you live in the 'burbs, they'll probably offer to order you some from their downtown office), but at truly crummy exchange rates, and often with a fee. It really isn't worth the hassle. » more

6. Can I use dollars in the U.K.? Some businesses in Britain may accept U.S. dollars—or at least be willing to change them for you—but this is far from the norm—and you will get a terrible exchange rate. Get your hands on some pounds as soon as possible and use those or credit cards for all of your transactions. » more

7. How can I get the best exchange rate? Always use a bank or its attached ATM. You'll get the best rates, If the banks are closed and you're in a bind, the next best thing is a commercial exchange office or booth (emblazoned with multilingual "Cambio/Exchange/Change/Wechsel" signs). If it's an emergency—late at night and even the exchange joints are closed—fall back on the hotel's front desk for the worst exchange rates. In a true pinch, some shops will also change cash (U.S. dollars, euros, or Japanese yen; rarely anything else) or traveler's checks. » more

8. Can I use my credit card in the U.K.? By all means, yes! Most of Europe takes plastic—save for a few smaller mom-and-pop trattorie and hotels. You also get a pretty good exchange rate when paying by credit card. Note that, no matter what the ad campaigns say, Visa and MasterCard are more widely accepted in Britain than is American Express, though AMEX is also pretty widespread (just don't rely on it exclusively). No other major American credit card (Discover, etc.) is even recognized in the U.K. so just leave the Sears and Shell cards at home. (For what it's worth, the Japanese JCB is also widely accepted.) It should be noted that you can sometimes get a better price if you offer to pay in cash. » more

9. Do I need traveler's checks? No, not really. Traveler's checks are prepaid checks you can get from your bank, AMEX, or AAA office then exchange anywhere in the world (at banks, hotels, and in some shops) for the equivalent amount in local currency. For decades, they were the way everyone carried the bulk of their travel budget, but the evolution of international computerized banking and proliferation of ATMs have rendered traveler's checks pretty much obsolete. You have to wait in a bank line (with ID) to cash them, fewer and fewer banks offer this service, and the exchange rate isn't as good as you'd get simply using your bank card at an ATM. That said, traveler's checks do remain a secure way to carry a few hundred bucks in emergency cash—if you lose them, you can get the money refunded in full. » more

10. Are there money scams in Britain I need to watch for? Sadly, yes. Not as many as some guidebooks and rumors would have you believe, but there will always be the occasional unscrupulous cabbie, waiter, or hotel clerk just waiting for an unsuspecting or clueless tourist they can take advantage of. Just be alert, scrutinize all bills, and read the full page on common scams to avoid the bulk of the rip-offs. » more