When we organise our summer holidays most of us end up dedicating several hours to hunting around on the internet to find the cheapest flights, hotels and car hire. However, once that is done we rarely give a second thought to the costs we’ll rack up while we are actually away. We should. If you use your plastic abroad, you’ll face various charges.
Use, say, a Barclays debit card to buy a round of drinks at your Italian hotel bar and you’ll pay a 2.75% charge for every transaction to cover ‘handling costs’. Use the same card to withdraw money from a cash machine that isn’t part of the Barclays Global Alliance and you’ll pay another 2% on top of the 2.75%. That adds up to a near-5% fee just for withdrawing cash!
Things are little better if you decide to keep your cards in your wallet and take cash on holiday instead: most retail banks and exchange places offer appalling ‘tourist’ exchange rates. And some like to add on a little commission for good measure. Good news then that, with a little work, you can avoid most of these expenses.
- It’s time to secure your cash
- The best credit card deals
If you want to take cash abroad, order in advance. Travelex promises to give customers the best deal in the market on currency – commission-free. If you find a better deal they’ll refund the difference. But only if you are not already at the airport – go to one of their desks there and you’ll get the left-it-too-late rotten rate they know you have no choice but to accept. So order your currency online from the Travelex website as late as the day before you travel and then collect it from their airport stands.
If you don’t want to use just cash – and given the risks of losing it or having it stolen it makes sense not to – you probably want to look at a pre-pay card. These work in much the same way as debit cards – you can pay for things with them or use them to withdraw cash. But instead of drawing money from your bank account you load them with money before you use them. Put £50 on the card and you can spend £50 with the card.
One of the best pre-paid options is the Caxton FX Global Traveller card. It can be used in any country, with any currency, anywhere that accepts Mastercard. The exchange rates on offer are good and there are no ATM charges when you use it to withdraw cash overseas. There is just a 2.5% FX mark up when you use the card abroad – so effectively you pay a 2.5% transaction charge. That is higher than some other providers but is the only charge Caxton levy. And as a final bonus, if you use it to buy Ryanair flights you don’t have to pay a booking fee. That adds up to a satisfying £5 saving per person per flight.
The drawback to the Caxton FX card is that you must load at least £100 onto the card at a time. The FairFX Anywhere card has a minimum load of £10, but this card costs £9.95 to buy, and you’ll be charged 1.5% if you load the card using a credit card. The other plus point of the FairFX Anywhere card is that it has a lower transaction fee at 1.5%.
Also, if you fly with Easyjet more than Ryanair, consider the Travelex Cash Passport. It charges a bit more than these two, but if you get the Visa Electron version you’ll avoid Easyjet’s booking charges.