The Daily Telegraph - Saturday - Travel
Cash is no longer king when it comes to holidays
Other European countries favour notes and coins more than us but there are advantages in using a card abroad, says Nick Trend
For four or five years now, I have had three €20 notes in my wallet. It didn’t seem worth converting them back to pounds and I have kept them so that I had some cash – just in case I needed it while travelling in Europe.
I am now beginning to wonder whether I shouldn’t just spend them and be done with it. The very fact that they have been there so long – even though I have made well over a dozen trips to Eurozone countries in that time – suggests that my precaution is an unnecessary one. After all, I never seem to need cash in the UK; I pay for everything by card. And it would be quite liberating to eliminate it from overseas travel too.
What are the risks? The only occasions I can think of where some cash might be needed – at least on arrival in a European country – are to pay for a taxi and, if you stay in the sort of hotel that has porters, for tips. But even when I was in Palermo a few weeks ago, where I rather assumed cash would still be king, I found the taxis had card readers. And in the hotel? I carried my own bag. And frankly, even if the taxi drivers had demanded cash and porters needed tipping, I could always have gone to a cashpoint to withdraw a few notes.
So what would the risks be of travelling without foreign currency? It’s certainly true that overall in continental Europe, cards are used less than in the
UK. Here, according to the Bank of England only 17 per cent of transactional payments are now made with cash and the vast majority of the rest are by card. By contrast, a study by the European Central Bank, published in December 2020, found that overall, 73 per cent of transactions were made with cash and 24 per cent by card. And it’s true that in some countries cash still dominates – especially Malta (where 88 per cent of payments were made in cash), Spain and Cyprus (both 83 per cent). But in Finland and the Netherlands respectively only 35 per cent and 34 per cent of the payments were made in notes and coins.
But, whatever the official figures say, my experience of visiting cities and popular resorts over the past four or five years has been that I have always been able to use my card – and there are huge advantages in doing so.
Generally the amount you lose on a card payment abroad is much less than you do when you buy foreign currency. The costs do depend on which card you use, however. There are various ways in which banks extract money from you, including direct fees on each transaction and through loading the exchange rate – and charges vary from bank to bank. But even the more expensive ones, which load the exchange rate by three per cent, work out cheaper than buying say, euros, at the airport.
For some years now, I have used a Monzo card (monzo.com), which makes no such charges (although you have to pay extra if you withdraw more than £200 a month from overseas ATMs). When you buy something abroad, the bank simply passes on the current Mastercard exchange rate, which has a mark-up of just 0.33 per cent above the European Central Bank’s rate.
Which? recommends Monzo, and also debit cards issued by Starling Bank, Cumberland Building Society, Virgin Money and Chase. It also highlights a handful of good-value credit cards that offer similar rates, including the Halifax Clarity Card (though credit cards are obviously only likely to be a good deal if you pay off the balance each month).
Anyway, having written this, I think I have convinced myself. I shall break free of the tyranny of paper money. I’m in France this week and I shall blow my €20 notes on a slap-up lunch in Marseille before I leave. Assuming, of course, that the restaurant accepts cash.