Using Credit and Debit Cards Abroad
As we begin to enter the time to think about where to holiday time of year, we go through the usual checklist of things we need to do.
Deciding where to go is not always the easiest as we are spoiled for choice. Many airlines offer cheap flights abroad if you are headed East, going West to North America is obviously more expensive.
But there are so many places to see and to relax, and there are packaged holidays which make the planning easier as well.
Once we decide where to go, then we have our own list of boxes to tick off:
* What to pack
* Do we check a bag
* Get money exchanged
Unfortunately for many of us, getting money exchanged is last on our list, and it really should be something we think about as soon as we decide where it is we are going to on holiday.
The reason for this is due to the ever changing exchange rates.
If you visit the EU, you need Euros, the USA, Dollars, as we know, each country has its own currency. And it is always a day-to-day change as to what rate the Pound (GBP) will get when exchanging currency.
We had been fortunate in that the Pound had been very strong against most currencies, but this has been changing.
So when it comes time to exchange money for our holiday, we need to maximise our efforts and get the best exchange rate we can. To do so, it can mean monitoring the exchange rates for a period of time.
This does not guarantee we will get a great exchange rate, but it gives us a baseline and benchmark to use, and knowledge of how the exchange rates are changing and trending; upwards or downwards.
Where you go to get money exchanged can be a factor in getting a good exchange rate, and also how much money you exchange.
There are online currency exchange sites that may offer a better exchange rate that your local Post Office or bank. In addition, the larger amount you exchange, some Bureau de Change or Exchange Chequers offer better rates for amounts over £500 or some over £750.
Waiting till the last minute to exchange money is always a bad idea. Exchanging money at airports has historically been the worst rates.
In some instances just over $1 for £1, and in some instances less that 1 Euro to the Pound.
The Chief Executive of FairFx, a currency trading firm, Ian Strafford-Taylor stated, “Over the last couple of months… we’ve seen several developments in Brexit negotiations, MP resignations and more recently a leadership challenge which have all sparked significant turbulence for the pound”.
“It remains to be seen how things will play out as we head towards the UK’s exit from the EU, but we are facing even more uncertainty, and uncertainty is one of the biggest causes of volatility for currency.”
So what about using your credit and/or debit cards abroad?
Credit and Debit Cards Abroad
I know what you are thinking, why exchange money and carry around a large amount of money, I’ll just use my cards abroad.
And yes, there is that option, and yes, it is convenient. However, there are also a few things you need to be aware of, and one of them may be notifying your bank or credit card company and informing them of your travel plans.
Some banks allow you to do this online via their Internet or mobile banking services.
The last thing you want to do is to try and use a card only to have it rejected as it may appear to be a fraudulent charge.
One good thing is using your debit or credit card abroad is that you get the most recent exchange rate, which may or may not be better than when you left.
However, you need to be aware of any additional fees for using the card outside of the UK, man banks and credit card companies can charge a “non-Sterling” transaction fee. This may be a flat fee of £2 or £2.50, or a percentage of the balance charged.
You need to calculate this fee in with your purchases, it may be cheaper to us the local currency.
And in speaking about the use of local currencies, when you use your cards abroad and are asked do you wish to pay in Pounds or (insert currency here), by paying in Pounds you may also incur a fee.
It may seem like an easy way to track your money paying in Pounds, but it may be cheaper paying in the local currency.
Ian Strafford-Tayor from Fairfx states, “When asked if they want to pay in pounds or local currency, opting to pay in pounds appears logical to holidaymakers as naturally they will think in their home currency,”
“But be warned. This is nothing but a hyper-inflated rip-off, duping holidaymakers into paying unnecessary fees and accepting unfavourable exchange rates.”
“The key thing to remember is, when abroad and asked if you want to pay in pounds or the local currency, always pay in the local currency to avoid nasty surprise fees.”