But which is the best, safest, and most-economical way of getting travel money? Those of you familiar with the technology may be planning on using Apple Pay (other smart phones are available) for your overseas spend this year – or you might be considering a specialist travel credit or debit card instead.
There are a few options, but first, plan ahead. Buying Euros from the Travel Money kiosk at the airport, using your credit card, won’t be the best option - they tend to offer the worst exchange rates, and if you do use your credit card, you can be hit with additional charges, such as cash withdrawal fees and interest, because essentially you’re withdrawing cash.
Ordering currency in advance will get you a better exchange rate. Even if you’re something of a lastminute.com kind of traveller, you could always order your currency from the airport and collect it on the way through.
Another option is to use a specialist travel card. These cards provide an easy, flexible way to manage your finances overseas, at lower rates than you’ll get from buying currency in a bureau.
Many of these cards come with digital interfaces, so you can install an app, or add it to your Apple Pay (or equivalent) technology. There are many providers of these specialist cards. Halifax and Barclaycard both have credit card offerings, while challenger banks like Monzo and Starling have debit card options.
Both credit card options have no exchange rate or withdrawal fees (unless you withdraw in the UK), although Halifax charges interest on cash withdrawals until your balance is paid off in full. The debit card options meanwhile, offer limited cash withdrawal options; with Starling you can make three cash withdrawals a day totalling a maximum of £300, while Monza allows you to withdraw £200 per month free of charge.
If you really want to embrace the digital age, you could explore mobile-based current accounts from providers such as TransferWise and Revolut. These companies are not banks (so they don’t have the same protection in place should things go wrong), but the flexibility of pre-paying money into your account and using your phone for all your transactions abroad, may appeal.
Both Revolut and TransferWise use the same mid-market rate you can find on Google, although TransferWise add a small, transparent fee to transactions, but both provide excellent exchange rates. Both accounts also allow for £200 free ATM withdrawals per month.
There are a couple of things to be aware of.
Revolut add transaction fees on weekends, when currency exchanges are closed. These can vary, from 0.5% for main currencies to 1.5% for smaller currencies. And, Revolut is currently losing money, which may lead to issues further down the line.
TransferWise add a minimum transaction fee of 80p to small purchases, which could easily mount up over a two week holiday.
ATMs – If you withdraw money from an ATM whilst abroad, always take the option to withdraw in local currency. If you don’t, the Bank providing the ATM will do the foreign exchange for you and charge some hefty fees.
So there a number of options and providers to choose from and a few things to consider, but for me, I’m going with Monzo – App and card. You get the Mastercard rate (note: the Mastercard rate might not be quite as keen as the mid-market price on average) and peace of mind that you are dealing with a regulated bank. If you're withdrawing cash abroad, you can withdraw up to £200 per month for free (after which you'll be charged a 3% fee) but you can still make payments in shops, restaurants and online for free abroad.
Whatever you’re planning – have a wonderful summer.
This article should be used for information purposes only and is subject to change without notice. None of the information contained in this article constitutes financial or other professional advice in any way. If you require additional information, you should contact Magus directly.
While Magus uses reasonable efforts to ensure that the information contained within articles is current and accurate at the date of publication, no warranties are made, either expressed or implied, as to reliability, accuracy or completeness of the information. Magus accepts no liability for any loss arising directly or indirectly from the use of or action taken in reliance on such information.
No warranty is given as to the freedom of this article from errors, defects, viruses, malicious programs or macros. Links from this article exist for information only and Magus accepts no responsibility or liability for the information contained on any such site. The existence of a link to another website does not imply or express endorsement of its provider, product or services by Magus. Please note that clicking on links to external websites will cause you to leave the Magus website.
Magus Private Wealth Ltd is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 3611274. Registered address: Kingfisher House, Northwood Park, Gatwick Road, Crawley RH10 9XN.