Best Travel Cards

Up until a few years ago, my trip planning routine went something like this:

Flights — Check

Hotels — Check

Delicious local restaurants — Check

Adventurous excursions for selfies — Check

Spending money — ????

Growing up as a 90s kid, spending money on holidays abroad involved a bum bag stuffed with 20 euro notes and gingerly navigating Spain’s sticky fingered locals.

Alas, times are changing. Spending abroad has largely been replaced with cards yet using your everyday card abroad could land you with excessive charges such as ‘non sterling transaction fees’ and ‘ATM withdrawal fees’.

With sterling falling against the euro (thanks Brexit) European holidays are becoming more expensive. In this article, I present a pick of the cheapest debit and prepaid cards for foreign spending and expose the worst.

The worst offenders

Using your debit card to buy a sangria at the pool could end up an expensive treat. Your debit card current account providers typically slap on up to three different fees. Your bank can charge a non-sterling transaction fee and a non-sterling purchase fee on card spending. Withdrawing cash from an ATM abroad will usually incur a non-sterling transaction fee plus a non-sterling cash fee.

Analysis of debit cards from popular UK high street banks found Lloyds to be one of the worst offenders. Lloyds charge 2.99% + £0.50 on every card transaction. For a £5 sangria, that’s a hefty £0.65 charge. Lloyds also charge 2.99% + £1.50 per ATM withdrawal.

Barclays, HSBC and RBS come in slightly cheaper for non sterling transaction fees at 2.75%. However, they still charge ATM withdrawal fees

The best debit cards to use abroad

Metro bank offers a competitive deal against its high street rivals. It doesn’t charge any fees on transactions or cash withdrawals in Europe. If you’re strapped for time before you head off abroad, you can open an account online and print your debit card instantly in a branch. Alternatively, you can request for it to be sent through the post.

Challenger banks Monzo and Starling Bank win the crown for the cheapest debit card option. Monzo and Starling Bank’s app only current accounts offer the wholesale Mastercard exchange rate with no additional fees. Monzo offers fee free ATM withdrawals for up to £200 per month, with a 3% charge thereafter. Starling Bank offers a deal sweetener with zero fees for unlimited ATM withdrawals.

Monzo and Starling Bank offer a user friendly app with real time notifications on foreign spend and the ability to free/unfreeze your card if lost or stolen.

Pre Paid Travel Cards

Another option for spending money abroad is a pre paid debit card. Prepaid cards can be loaded up with money and used like a debit card but they don’t have a borrowing facility.

The most competitive products available include FairFX, Caxton, Travelex and Revolut. Each provider offers different currency conversion rates and some charges for ATM withdrawals. Revolut has no monthly fee or foreign transaction fee on its Visa card and offers up to £200 per month fee free withdrawal. There is however, a delivery fee for a debit card.

Most of these providers also offer an app through which you can load money and also a freeze function to disable the card which can come in handy if you lose it after a night out!

Final tip: beware of Dynamic Currency Conversion!

We’ve all been there. You’re in a shopping mall buying souvenirs for your family back home when the cashier presents a screen on the card machine asking if you want to pay in your domestic currency i.e. GBP or the local currency, i.e. EUR. Its a natural instinct to pay in a currency in which you feel most familiar and can readily assess.

However, avoid this ploy at all costs. Dynamic currency conversion (DCC) is typically offered at both chip and pin card machines and ATM withdrawal and applies a hefty exchange rate. The typical conversion rate is a shocking 7.7% according to FairFX. So repeat this mantra after me — always pay local currency abroad! Never fall victim to the DCC rip off.

For more travel tips, check out my website www.countryescapes.io