There’s only one thing more certain than sunshine if you holiday abroad: your holiday spending will cost you dear. Holiday currency exchange is a licence for banks to print money, says Dido Sandler in FT Money. She has a point. Foreign loadings, transaction fees and commissions are just some of the extra charges you could end up paying.
Let’s say you withdrew £1,000 from a cashpoint abroad with a Lloyds credit card. You would pay a 2.75% foreign loading fee and a 2% withdrawal fee. In addition, your interest rate would be 19.5% – and there’s no interest-free period. So you would pay a total of £47.50 in charges.
There’s got to be a better way. If you take cash, make sure you buy it before you go. If you order your currency on the internet, £500 would buy you €707 from Travelex – but the same company would give you only e685 at the airport, according to Alison Steed in The Daily Telegraph. You can keep the cost down by using a firm that doesn’t charge commission – try the Post Office, Marks & Spencer or Thomas Cook. Also, shop around for credit cards and bank accounts. Nationwide’s credit and debit cards do not charge a foreign usage fee and HSBC’s new Plus account also offers free cashpoint withdrawals abroad.