Making the most of your holiday money
LILY CANTER ON HOW TO ENSURE YOUR CASH GOES FURTHER WHEN YOU FINALLY GET THAT BREAK ABROAD
WITH travel hotspots Barbados, The Azores and Malta joining the green list, Brits are catching the last of the summer holidays. Here, we look at the best ways to spend money abroad.
Exchanging cash
Travelling with large amounts of cash can be risky but having around £100 of local currency to cover the first 24 hours is usually a sensible idea.
Shop around for the best currency conversion rates and don’t assume the Post Office or a high street Bureau de Change will have the best deals. Online currency companies such as Travel FX and Fourex often have good rates. Make sure you build in enough time to receive the cash by post without having to pay a next-day delivery fee.
‘The one thing to avoid is exchanging it at the airport – they charge the highest rates,’ says travel expert Hayley Knight, one half of @thewanderingcouplet on Instagram.
Debit and credit cards
With many place remaining cashless due to coronavirus, bank and cash cards are usually the best option for spending abroad. With a credit card there is the added protection of Section 75 cover for purchases over £100, meaning you should be able to get your money back if something goes wrong.
By choosing the right credit card you can get the market rate – the exchange rate the banks get – which is not available on the high street. Rob Burgess of travel rewards website headforpoints.com recommends the Barclaycard Rewards credit card, which has no foreign exchange fees for purchases or cash withdrawals. It also gives 0.25 per cent cashback on all your spending, in the UK or abroad.
‘Halifax Clarity is a long-established product with no annual fee and no FX fees or cash withdrawal fees, although you don’t earn cashback. Some neobanks such as Monzo also remain totally free for overseas spending for now,’ adds Rob.
With all credit cards, make sure to pay the balance off in full to avoid any interest fees. A non-credit card option is the Mastercard product Currensea, which acts like a debit card. You pay a fixed 0.5 per cent exchange fee on purchases abroad and the money is taken directly from your current account. You save 2.5 per cent compared to using your debit card and the card does not appear on your credit report.
Prepaid cards
If you want complete control over your budget then a prepaid travel card is a good option. You can load it with your chosen currency before travelling abroad and use it like a debit card.
The disadvantage of a prepaid card is that they are not as widely accepted as credit card, particularly for car hire, petrol stations and motorway toll booths. They can also have hidden fees for transaction, withdrawing cash or even not using the card enough.
The Revolut prepaid card offers free cash withdrawals in over 140 currencies but there is a limit of £200 a month. As a Visa card it is widely available for cashless payments and you can transfer money from your personal account directly to your Revolut account.
Don’t get caught out
It is important to keep an eye on cash withdrawal fees when abroad and to always opt for the local currency.
The Wise currency borderless account card is a good choice for taking out cash because you are not restricted to one currency and can hold money in multiple currencies if needed. As a general rule always opt to be charged in the local currency rather than in pounds.
‘Dynamic Currency Conversion is where local retailers and restaurants give you the option to pay in your home currency abroad. This is another trap to avoid, as invariably the exchange rate will be tipped in the retailer’s favour,’ says consumer rights expert Scott Dixon of thegrumpygit.com.
Don’t be afraid to ask at the point of payment what the exchange rate is for the local currency and what it is for pounds so you are able to calculate the difference.
Mobile phone charges
Since the end of last year, the EU rules on roaming charges no longer apply in the UK. This means that, like other destinations, the amount your mobile provider can charge you for using your mobile phone in EU countries, Norway, Iceland or Liechtenstein is no longer capped.
Check with your mobile phone operator before you leave what the roaming charges are. This information should be available on their website. All providers have to apply a £45 a month cut-off limit on data (excluding VAT), anywhere in the world, unless you have opted into a different limit. To avoid data charges, buy a SIM card for the country you are visiting or turn off data roaming and only use wifi.