Don't waste money when on holiday
Spend using the right Credit or Debit Card
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Last update : September 2010
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| Firstly let's look at the three main charges levied when using a credit card abroad - |
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- Exchange rate load - The actual exchange rate the currency conversion is based on is competitive, however most card providers will add an exchange rate load which is usually 2.75%. And it's hidden into the rate so you won't realise it's been charged. See also How to get the best Exchange rate for your cash when travelling abroad
- Per transaction cost - Every time the card is used a flat rate fee is charged, around £1.50
- Cash withdrawal charge - If you withdraw cash from an ATM or a local bank expect to pay around 2.5% with a minimum of £3 (don't forget that you'll be charged interest on the cash as soon as it's withdrawn)
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£1.50 here, 2.5% there, it never seems like that much but these fees really start to add up especially if you spend a fair time abroad each year. Also note that these charges are often the same whether using a Credit or a Debit Card.
The solution to far cheaper travel money is simple - seek out a Credit Card/Debit Card that offers the best deal on foreign spending and money. The three best ones right now are -
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| Post Office Card |
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European load
Outside Europe load
Per transaction cost
Cash withdrawal fee
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0%
0%
none
2.5% |
| Nationwide |
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European load
Outside Europe load
Per transaction cost
Cash withdrawal fee
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0%
1% (from July 2009)
none
2.5% |
| Saga (have to be over 50 years old) |
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European load
Outside Europe load
Per transaction cost
Cash withdrawal fee
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0%
1%
none
2% |
| The best debit card on the market right now is Nationwide's |
| Nationwide Debit Card |
European load
Outside Europe load
Per transaction cost
Cash withdrawal fee
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0%
1% (from July 2009)
none
none |
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However, there are two potential problems with using a debit card abroad - |
- Money stolen from the account is normally harder to claim back, and
- Goods and services bought are not covered under Section 75 of the Consumer Act (see this FAQ for more information)
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| I use Nationwide's Products When Abroad |
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Personally when I go on holiday I use a Nationwide debit card and make sure I'm careful where and how I use it. For example, I will tend to use ATMs in busy areas like shopping malls (less chance of them being targeted by fraudsters) and I fully cover my hand when typing in my PIN.
Always a good strategy when returning from holiday is to log into your online accounts as soon as possible and look for any strange behaviour. Plus keep a close eye on your accounts for the following 2 weeks - often fraud is committed when you're back home.
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| Why not use a Nationwide Bank account just for holiday money |
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Finally I know many people who have opened a Nationwide account just to use for holiday money. Most of the year there's a few pounds in the account but a week or so before the holiday, cash is added.
This works beautifully and can be easily managed with internet banking where sending cash to different accounts can be done in with a few clicks of the mouse, 24 hours a day. See also - Simple steps to safer internet banking
And with increased online security it's hard for fraudsters to gain control of your online accounts unless you're extremely negligent when protecting your personal details - www.nationwide.co.uk
See also
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Read more in the Credit Cards section:
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