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As Summer approaches, many Britons have started putting away spending money for their summer holidays. With credit and debit cards accepted in shops, restaurants, hotels and cafes all over the world, and the risk of theft and pick-pocketing when travelling, you might be planning to forget about exchanging big wads of cash for foreign currency, and use plastic instead. Today's blog post will tell you how to save money when using credit or debit cards in foreign countries.
Research Your Card
Most banks and credit card providers will charge fees for using your card abroad. Before you go anywhere, look into what fees and charges you can expect for the following:
- Using your card outside the UK
- Paying in foreign currency
- Currency exchange (this might be a percentage or a set charge)
- Using cash machines outside the UK
In most cases, there are less fees associated with using a credit card abroad than with a debit card. You're also likely to have better legal protection for goods purchased with a credit card. Just don't spend more than you can afford to pay off at the end of the month, and remember that your card may have a spending limit.
On the other hand, credit cards tend to charge higher fees for using ATMs, especially overseas. Cash machines are not usually the cheapest way to acquire foreign currency, but if you plan to take out cash, the debit card is a better choice.
If you have both a credit and debit card, then think about how you plan to use the card and take the one that will be most appropriate, or take both.
Let Your Bank Know
Using your card away from home, especially in a foreign country, will throw up red flags for your bank's fraud prevention department. Even if you're only bringing your card for emergencies, tell your provider what dates you will be in which countries, so they know your card hasn't been stolen.
Even if you've told your provider you are going to be away, your card might still be temporarily blocked. Don't get angry, they're only trying to protect your money. Most providers have an international 24 hour customer phone number. Make a note of the phone number for each of your cards and let them know before you make any big purchases.
It goes without saying that you should be extra vigilant with your cards and money while travelling. Not only do thieves target holidaymakers and tourists, but it can be hard to return for lost or forgotten items when you're a visitor. Keep your international card provider helpline phone numbers in a separate place from your cards, so you don't lose both at once.
If you'd rather leave your cards at home but still want the convenience of electronic payment, you could buy a pre-paid card. You 'load' the card with money in advance, and then use it just as you would a credit or debit card, but with its own set of fees and charges which will vary between providers and offers. Some pre-paid cards are designed for travel and use abroad, so you may find their international fees are lower than your debit or credit card.
If your destination is a big tourism spot, local businesses might give you the option of paying in pounds sterling instead of the local currency. While this may save you from being charged for currency conversion by your bank or credit card provider, there's a good chance that the exchange rate will be poor. Check the maths if you can to be sure, but it's usually cheaper to pay in the local currency and pay your provider's conversion charge.
Finally, you can keep track of your spending by adding your card to your money management software account with Money Dashboard, that way you'll be able to reign in a buying frenzy before you end up spending next month's mortgage payment on a big stuffed donkey.