With the summer holiday season officially in action many people will be jetting off for some much needed sunshine abroad.
But with the cost of living crisis hitting hard it's important to try and save money where you can.
Money Saving Expert (MSE) Martin Lewis has shared his top tips for travellers when it comes to travel money so you don't end up getting ripped off by exchange rates.
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According to the MSE's website, using the wrong card abroad could really hit hard and urges people to be clever when paying for things on holiday.
Here are their top tips for travel money:
1. Spending the wrong way could cost you
Ultimately, when abroad you want to pay for only what you buy, yet by doing it the wrong way many also pay for paying, too. Here's how much spending €1,000 can cost, in pounds (we assumed five €100 cash withdrawals and 20 transactions of €25 each on the cards).
- Top prepaid card: £835
- On a specialist credit card repaid in full: £836
- Cash, via UK's cheapest bureau: £844
- Change at airport: £857
- Using a debit card from hell: £891
The winners are clear – apply for a specialist overseas card, then use it every time you go.
Below, we've got the full lowdown on travel credit cards, travel debit cards and prepaid cards – and cash, if that's your preference.
2. Always pay in the local currency
Many overseas hotels, shops and ATMs ask this when you pay by card. If you choose pounds, the retailer does the currency conversion – but rates can often be poor compared with letting your card do it – see Martin's euro analysis for how this worked for him on a European trip.
If you've got a top overseas card, ALWAYS choose the local currency, as your card does the exchange and it's unbeatable.
If you're using a bog-standard credit or debit card, it's touch and go. Sometimes the card machine will show you the 'non-sterling cash fee'. If this is under 2.5%, go with pounds. If it's over, pick the local currency.
3. Check your cards
Never just blindly spend abroad with ANY card – use the MSE tool HERE to find out what it'd cost you to pay with your existing plastic before slipping it into your suitcase.
Best Travel Money options
Which type of travel money you should use depends on your preferences and circumstances. There are four main forms of payment that you should choose from before you go abroad:
- Travel credit cards – near-perfect exchange rates and purchase protection
- Travel debit cards – near-perfect exchange rates and no hard credit check
- Prepaid travel cards – lock in a rate before you go
- Cash – good as a backup where card is not accepted
Avoid changing money at the airport
Using an airport bureau is the easy option, but it's such a waste. Airport and ferry port rates are usually dismal, as they know they're the last port of call and you're a captive customer.
Far better that you use TravelMoneyMax before you go or, if you've left it too late, at least order in advance online to pick up at the airport to get better rates.
Don't buy travel cash or load a prepaid card with a credit card
If you're buying currency at a bureau de change, or online through TravelMoneyMax , there's a hidden charge you could fall foul of if using a credit card.
Buying currency is counted as a cash withdrawal, so you could face a myriad fees, including cash withdrawal fees, interest, or even a fee for using a credit card charged by the money changer. Some card providers also treat loading a prepaid card using a credit card as a cash withdrawal.
So if you're buying currency or loading a prepaid card, ALWAYS use a debit card, which isn't allowed to charge this fee, or withdraw cash and pay with that instead.
For more top tips for saving money on holiday, you can click HERE.
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