How to go fur­ther with your hol­i­day cash

The Jewish Chronicle - - LIFE -

YOUR MONEY should stretch much fur­ther if you’re head­ing to dol­lar des­ti­na­tions this sum­mer. The pound is up 14 per cent on last year at $1.70, a five-year high. It’s also at an 18-month high against the euro, at €1.25 — 10 per cent up on last sum­mer. Yet, just be­cause the rate is strong doesn’t mean you’ll gain. Here’s what you need to know:

Don’t waste big money on for­eign money. Ul­ti­mately, when abroad you only want to pay for what you buy, yet by do­ing it the wrong way many also pay for pay­ing, too. To demon­strate the im­pact here’s how much €1,000 in spend­ing costs you (rates move daily so these were all done on one re­cent day). Spend us­ing specialist credit card: £800 (see point 2); via UK’s cheap­est bureau: £804 (see point 5); change money at the Post Of­fice: £829; spend on debit card from hell (40 trans­ac­tions): £882 (see point 4); change at air­port: £890 (see point 9).

There is an easy way to get the best rates in ev­ery coun­try. Most credit and debit cards add a three per cent load when you spend abroad, so spend £100 in eu­ros and it costs £103. Yet a few specialist, no an­nual fee credit cards are load-free world­wide, so it just costs the £100. This is the same near-per­fect rate the banks get, smash­ing ev­ery­thing else, in­clud­ing top bureaux de change. Yet to make this work, en­sure you al­ways re­pay in full or the in­ter­est cost dwarfs any gain from the bet­ter rate. The top pick is the www.halifax.co.uk card, as it has the low­est over­seas charges. Yet other load-free credit cards in­clude Saga, the Post Of­fice, and Na­tion­wide Se­lect. For a full card run­down see www. mse.me/trav­el­cards. Be aware that it is bet­ter to spend on these cards than with­draw cash.

Get­ting the top over­seas card if you’ve poorer credit. The only way to know if you’ll be ac­cepted is to ap­ply, then they credit check, but that leaves a foot­print on your file. So it’s worth find­ing out first which cards are most likely to ac­cept you — www.mon­eysaving­ex­pert.com/OverseasEli­gi­bil­ity is a free tool which shows your odds for each card. Within it is the www. cap­i­talone.co.uk Clas­sic Ex­tra, which ac­cepts even some with year-old de­faults. It’s also load-free world­wide and pays 0.5 per cent cash­back on all spend­ing — a use­ful dou­ble pur­pose (pro­vided you re­pay in full each month). How­ever, as it’s 34.9 per cent rep­re­sen­ta­tive APR and you’ll be charged this (plus a fee) on cash with­drawals even if you re­pay, in full, just use it for in-store spend­ing rather than cash.

Debit cards can be the worst way to spend abroad. If you have a Bank of Scot­land, Halifax, Lloyds, San­tander, TSB, or NatWest/RBS card, be­ware. They are my over­seas “Debit Cards from Hell”. Not only do they add a load to ex­change rates, and an ATM fee, they also charge up to £1.50 each time you spend.

Get the best travel cash rates in sec­onds. My www.Trav­el­Money­Max.com travel money com­par­i­son tool com­pares rates at about 40 on­line bureaux.

Find a top pre-paid card. Here, you load with cash be­fore you travel, then use like a debit card. If you lose it, your cash is pro­tected. You get the rate on the day you load/buy, not when you spend, so cur­rency fluc­tu­a­tions may mean you get a worse deal.

If asked “Do you want to pay in pounds or eu­ros?” an­swer eu­ros. When pay­ing on a card abroad, you’re of­ten asked if you want the trans­ac­tion to be in pounds or the lo­cal cur­rency. As a gen­eral rule, never pay in pounds. That means the over­seas store/bank is do­ing the con­ver­sion and rates are aw­ful.

The cheap­est debit card abroad. I pre­fer cheap credit cards, as it’s a big sch­lep to change your bank just for cheap spend­ing abroad. Yet if that’s what you want, the www.nandp.co.uk Gold Clas­sic cur­rent ac­count is the only load-free world­wide debit card (Metro Bank added non-Euro­pean load­ing in March, and it has no ATM fees. You’ll need a min­i­mum £5,000 in it, or pay in £500 a month, or there’s a £5 monthly fee.

Don’t change your cash at the air­port (or at least or­der ahead). Air­port and ferry port rates are usu­ally dis­mal. Far bet­ter to use www.Trav­el­Money­Max.com.

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