As you look forward to your summer holidays, it’s unlikely that how you’re going to pay for things while on your travels is what’s getting you excited. But choosing wisely could save you some serious £££s.
Whether that’s by getting a better exchange rate, or by avoiding the hefty fees and charges that often come with using the wrong credit or debit card overseas.
Money, money, money
As part of a Which? investigation I found that someone exchanging £500 could get an extra €80 or $81 if they choose the right place to change their money.
But actually – although it’s always sensible to take some foreign currency with you, in case of emergencies – I’ve found it’s far better to get a good card to cover most of your holiday spending.
This is because the underlying exchange rates used when you spend money on a card are often much better than those you will get when exchanging cash.
First though, a bit of a health warning with this, it’s vital to choose the right card otherwise you could end up racking-up lots of fees and charges.
For instance, a typical fee for using a debit card overseas is 2-2.99% of your foreign transaction, and an extra £1.50 – £5 on top of that fee if the transaction was for an ATM withdrawal.
But, there are a number of good card options. A credit card with 0% fees for overseas spending is one option – there are quite a lot to choose from.
If you’d rather not apply for a credit card, prepaid cards, Monzo and Revolut will also let you spend overseas with no fees, and come with great exchange rates (something not true of all prepaid cards).
Both of these cards are managed via a smartphone app, so you need to be happy with that. But for me, I really like this as they come with handy features such as the ability to track your foreign transactions in real-time (including how much they cost you in £s) and to instantly block your card if it’s lost or stolen.
Last summer, we polled you here on Which? Convo and asked ‘Do you mainly use cash or cards for your holiday spending?’ – of the 334 that voted in this poll, 42% of you said you paid in cash, 31% on credit card, 15% on debit card and 11% on prepaid cards.
So, will you be reconsidering how you spend money on your summer holiday? Do you have dedicated cards already? If not, would you consider getting one?