Summer is here, and time for a well-earned break. Despite worries about the impact of our jet on the environment, and that the sun we are seeking might have become a little too warm, many of us are still heading abroad.
But we may prefer to leave our money behind.
A trip to the Bureaux de Change and getting the local currency used to be part of the holiday build-up. These days you can simply use your card.
Your debit or credit card will be as welcome abroad as it is at home. Shops, restaurants, bars, even the vendor with the beach ice cream will probably have the necessary gadget. Some taxi drivers may still prefer cash, and market traders may not welcome your plastic or mobile app, but many are moving with the times.
Here are some tips to make things problem-free.
Play the right card
Some debit and credit card providers charge a โnon-sterling transaction feeโ when you use your credit card to spend or withdraw cash in a foreign currency. This will be added to each transaction you make and will typically be about 3%. Some card companies may charge more, and others may not charge at all.
Check what youโd be charged on your card providers website. If your issuer charges, you might want to find an alternative which doesnโt. While you are looking round, see if there are any offering extras โ like travel insurance deals โ which could stretch your holiday budget.
Tell your card provider before you go
Card providers are on constant watch for fraud. Their systems can freeze your card if they spot an unusual transaction โ such as it being used abroad. Giving your card provider a quick call or using their app to tell them when and where youโre going on holiday could avoid being locked out, embarrassed or stranded.
Just in case your card does get frozen while you are away, keep a note of your card providerโs contact details on your phone.
If you do need cash, you can use an ATM in most parts of the world, but withdrawing cash with a credit card always means โhandlingโ fees. These can go up when youโre abroad, and you may still have transaction fees on top.
Using a debit card to withdraw cash while youโre abroad might be better, as the mysterious handling fees donโt apply when it is your own money from your bank account.
Sterling or local currency
You might prefer to pay in sterling, because it makes it easier to understand how much you are paying. But be careful. It could be more expensive.
If you pay in sterling, the exchange rate will be worked out by the company youโre spending with and will not be calculated in your favour. If you pay in the local currency, the exchange rate will be set by your card issuer and should be much fairer. Even if it means paying transaction fees itโs usually cheaper to pay like a local.
You can still have purchase protection abroad. Under the Consumer Credit Act and applies when you buy something that costs over ยฃ100 but no more than ยฃ30,000 on your credit card. If there is something wrong with what you buy, or it is a breach or misrepresentation of contract, your card provider should sort things out for you.
Donโt want to use your usual card?
Using your usual card abroad should be simple, but if you are concerned about hidden costs or the temptation to spend too much there is an alternative.
Pre-paid travel cards let you pay by card while youโre on holiday and donโt want to risk your usual credit or debit card. You load them up with money before you leave. Some pre-paid card providers still charge fees if you use them abroad, so you look for a pre-paid card thatโs designed for travelling. Overall, a travel card can be a convenient and secure way to manage finances while traveling, but itโs important to compare the fees and benefits before choosing.
Need some help finding the most suitable prepaid travel card or card deals or finding new solutions to your money needs all year round? Contact us at Continuum.
And have a great holiday.
Top travel cards: the best credit and debit cards to use abroad (moneysavingexpert.com)
https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice and you should seek independent financial advice before embarking on any course of action.
