Holidaymakers could pay more than £ 20 for € 100 by swapping their travel money the wrong way this summer, an analysis by MoneySavingExpert reveals.
If you are lucky enough to leave, it helps to understand the different ways you can get hard cash. Whether it’s using a travel card abroad, ordering cash in advance, or exchanging pounds sterling at the airport, our analysis shows that getting cash currency the wrong way could cut your vacation budget by over 20% – so we show you how to get the most out of your buck.
For more tips on how to avoid getting ripped off when exchanging money, check out our guide on cheapest ways to get travel money.
What does our analysis show?
By spending for a best foreign travel card is the easiest and in most cases the cheapest way to spend overseas, we know many of you like to have money in your wallet, so we compared the cost of get € 100 and € 1000 in cash in different ways. For the cards below we have assumed one overseas cash withdrawal for € 100 and five withdrawals for € 1,000 – using an ATM that does not charge a fee.
Of course, there is no guarantee that you will get the same rates as they change every day, but the general principle of the cheapest method is unlikely to change.
To note: The Clarity Halifax guaranteed payday loans and Starling Bank debit card were our favorite overseas cards, while Revolution was our prepaid choice. First Direct was the ‘standard bogs’ debit card (typical 2% fee), Santander 123 was a card from hell (2.75% transaction fee plus 1.5% cash fee under ‘use a Santander ATM in Spain), while we were using our TravelMoneyMax tool for the best rates on cash before the trip.
The cheapest ways to get travel money
Using a superior card abroad like Starling or Halifax Clarity, which charge no transaction fees, to withdraw money from an ATM abroad at no cost – as opposed to a standard credit / debit card which charges a typical fee of 2 / 3% – is the cheapest way to get change.
While the Revolut prepaid card is the cheapest option to withdraw $ 100 (because it uses the perfect interbank rate, rather than the near-perfect Mastercard or Visa rate used by other cards), the above cards are our Better choices because Revolut limits free withdrawals to £ 200 per month and adds a 0.5% to 1% fee on weekends.
Alternatively, our TravelMoneyMax The comparison tool is a decent option if you’re someone who likes to have euros in your wallet before you go as it compares rates from over 30 offices, for delivery or pickup.
As we have always said, the most expensive way to get money for travel is to exchange money at the airport without pre-ordering because it is a captive market – in our example you would have over £ 20 less by exchanging only € 100 and a £ 140 is worse when exchanging € 1000 – so avoid airport scams.
Although our focus is on getting Euros, if you are going somewhere else and want the cash, the general rule will still apply.
Important: always withdraw money in local currency
No matter how good your card is, picking the wrong option at an ATM and it can be costly. So always opt for local currency when withdrawing currency or making a transaction with your card abroad. Using the retailer’s own exchange rate or letting the local bank do the conversion for you is likely to give you a much worse rate than your bank offers, even if you don’t have a first-rate overseas card. .
While it might seem straightforward, we’ve seen examples of overseas ATM providers using often confusing wording – apparently hoping you’ll come to terms with the low exchange rate, so be sure to read the options carefully below. ‘screen.
In the image below (taken in Spain on July 9, 2018), if you had chosen to accept the ATM’s own exchange rate for the € 70 withdrawal, you would be worse off than if you had chosen to let a higher overseas debit / credit card process the transaction for you – even after factoring in the ATM transaction fee.
To find out why you should always pay in euros, not pounds, see Martin’s Using plastic abroad? Blog.
Beware of ATMs that charge fees
As well as withdrawing in local currency, it’s also worth looking for overseas ATMs that don’t charge a fee, as many charge € 2.95 on each withdrawal – some even more. While these aren’t always easy to avoid, free ATMs are more likely to be found when connected to physical bank branches, rather than located next to major tourist attractions or at more beach resorts. small. Unfortunately, in some countries free ATMs are rare, even at bank branches, so factor that into your budget.
If you can only find fixed-fee ATMs, it will be cheaper to withdraw larger amounts at once rather than making multiple, smaller withdrawals – although you have to weigh the savings against the implications. security of the detention of a lot of money. (many travel insurance policies will not cover you for cash over a certain amount).
For more tips on getting your money’s worth (or euros), see our guide on 19 cheapest ways to get money for travel.