Nowadays I take very little cash with me when I go on holiday because it’s usually cheaper to pay with the right sort of credit card when you’re abroad. Any credit or debit card will use the Visa, MasterCard or Amex exchange rates at the time of the transaction and that will be the best rate you can get.
However, most banks and card providers add on what’s called “foreign usage loading”. So the moment you step across the UK border, most will add nearly 3% to any transaction you make and keep it for themselves. So before your next trip apply for one of the credit cards that do not do this. There are now more than a dozen that don’t charge you a foreign usage fee – either abroad or when ordering items from other countries. But almost all do charge you for withdrawing cash – here or abroad.
Halifax Clarity MasterCard charges nothing for foreign usage on any transactions and does not charge for cash withdrawals at home or abroad. The rate of interest charged between taking out cash and paying it off in full (which, of course, loyal readers of my column always do!) is 18.95% per annum. That could mean interest of 2% or more over the period you borrowed, so pay it off as soon as you can to reduce that.
Barclaycard Platinum Travel Visa has no foreign usage charge and charges no interest on ATM cash abroad. Others typically charge 3% of the cash withdrawn; more if it’s below £100 because of a minimum fee, typically £3. In some countries cash machines will levy a charge on any withdrawal.
Of course, you always need some cash – for taxis or in bars and in countries where cards are not widely used. Get your cash in good time; you should never, ever buy it at the airport. I prefer to collect –Eurochange or Debenhams are good, as I write. Finally, when you pay by card abroad, always reject the offer to “Pay in sterling”. That will bypass the good rate on your card and cost you extra.
For more information, go to moneysavingexpert.com and search “travel money”.