There isn’t much you can do about it, but whether you want euros, dollars, ringgits, or dong, you can make sure you don’t pay more than you need to pay overseas. As of this writing, £ 500 is buying just € 560 at the best rates, up from € 590 in March and € 715 before the June 2016 European referendum. Against the dollar, £ 500 is earning $ 630 now versus $ 670 in March . And it’s a similar story against many other currencies.
The easiest and cheapest way to spend abroad is specialized plastic
These can take at least a week to arrive, so sort it out sooner. Spend overseas on plastic and that adds a three percent ‘non-sterling exchange fee’ meaning £ 100 euros cost you £ 103 and cash withdrawal fees are added. Specialist cards do not do this.
These give you the same nearly perfect rates that banks get EVERY time you go to any country. So pocket one and take it abroad.
- Top for cheap spend, reliability and £ 20 free. The clarity halifax.co.uk gives almost perfect rates on spending anywhere, plus apply by August 29th, and spend within 90 days and you get £ 20 cashback. Just make sure you pay it back IN FULL each month to avoid interest on your expenses. Better to spend than withdraw money, because for cash you pay 19.9% APR interest on withdrawals even if you wipe them out completely (around £ 1.50 per £ 100 / month), but even with that, it usually beats most money changers.
Key though, will you get it? To find out, use the eligibility calculator at www.mse.me/overseaseligible.
- Inexpensive spending and cash withdrawals, with no credit check. The app-only starlingbank.com debit card has no overseas charges on spending and withdrawals (max £ 300 / day in cash). Plus, there’s only a limited credit check (unless you want an overdraft) so the vast majority of people can get it. Technically, it’s a checking account, but you don’t need to switch to it, you can just add money to it and use it just for spending overseas.
As to which one is better, that’s a tough call. I would probably cover myself just for Halifax for three reasons:
- The £ 20 cashback.
- It has been a top choice for years. Starling is new, and we’ve seen similar debit cards, which were cheap for a while to attract people, before the costs went up.
- With Halifax as a credit card you get Section 75 protection meaning if you buy things that cost £ 100 + the card company is legally responsible. So if you bring it home and it breaks, you can ask your card company to sort it out rather than take it back. Starling is a debit card, so doesn’t have that.
Again, this is a good call. Starling is easier to get, has a great app, pays a tiny bit of interest when on credit, and is not a credit card some don’t trust.
Beware of hell overseas debit cards
Some standard debit cards not only add three percent to the exchange rate and charge an ATM fee, but they also add a fee whenever you use them abroad – so a £ 5 glass of wine could cost £ 6.40 a time. Check yours. ANY other card, including a credit card (provided it is FULLY refunded), is cheaper to spend than these.
Buy euros now or wait?
With Brexit delayed until Halloween (at the earliest) and a lot of political uncertainty, many people leaving in the coming months are wondering ‘should I buy euros now or wait?’
The answer is I don’t know and anyone who says they know what’s going to happen is a liar. Currency movements are unpredictable, like raindrops on a windshield, there is no way to know which way it will take.
If you’re worried, protect your bets and buy half of it now, and for the rest, use the best specialty credit cards when you’re there (because they give you the rate for the day you go). If you’re really worried, ask yourself, “Would I be happy with today’s rate?” If so, and you are really worried about the rates going down, your vacation becomes unaffordable, play it safe and buy more now.
Martin Lewis is the founder and president of MoneySavingExpert.com. To join the 13 million people who receive their free weekly Money Tips email, visit www.moneysavingexpert.com/latesttip