Brits heading to France, Spain and Italy warned of simple thing 'adding 20 per cent' to holiday

Howard Lloyd
·3-min read
Matt Allwright
-Credit: (Image: BBC)


The holiday season is in full swing, and there is nothing Brits love more than jetting off abroad for a bit of R&R. While many have travelled to Germany to cheer on England in the Euros, destinations like France, Spain, and Italy remain firm favourites.

However, as much as we love a foreign getaway, one question always causes a headache - what's the best way to get hold of foreign currency? It might not be the most exciting topic, but one money guru has warned that you could end up shelling out a staggering 20 per cent more than necessary on foreign currency.

Appearing on BBC's Morning Live, Matt Allwright shared his top tips on how to ensure you are getting the best deal when it comes to foreign currency - and how to avoid being stung by your bank or card provider.

"What we do know is that the way you withdraw money and spend overseas can make a huge difference. Some methods are far more cost-effective than others. You can save 20 per cent if you do it the right way rather than the wrong way," he advised.

"My top pick is a pre-paid travel card. This is something that typically doesn't require stringent credit checks, you can keep it in your pocket, it arrives at your door within a week or so, and you can regularly top it up with cash using the app on your phone in the currency of your choice, then use it just like your debit card.

"The beauty of it is it helps you budget. You can load it up every few days and see how much you are spending. Everybody thinks holiday money is free money it is not. It is the same as the rest of the year. And you can check the exchange rate as you make that exchange.

"There are loads of them out there. They have a variety of different fees so some will suit you better. You will know what you are likely to spend so read the details. They are really useful tools to have in your pocket."

You can use the card for purchases at retailers or to withdraw money from ATMs, often in the local currency of your destination, and without risking foreign exchange fees. You can also often lock in an exchange rate when you load the card, giving you the best deal for the duration of your holiday.

However, unlike bank accounts, prepaid cards aren't covered by the Financial Services Compensation Scheme, so act quickly if your card is lost or stolen.

As for the worst option, Matt warned that credit or debit cards are often the wrong choice. He said: "We know that, very often, credit or standard debit cards which you might already have in your pocket already take exchange rates from Visa or MasterCard and add a foreign transaction fee and a Stirling transaction fee those are the terms you need to be looking for from your regular provider.

"That can be up to three per cent, meaning something costing you £100 in foreign currency suddenly costs you £103. It also applies when you are buying foreign currency online. Some debit or credit cards don't apply this fee. Check with your provider because it might be fee-free.

"You are still protected by Section 75 with credit cards - that extra protection you get still works overseas. If you are buying bigger things overseas, that can be a really useful thing to have.

"Some cards, in addition to the three per cent, will penalise you further per transaction for spending money overseas some even more when it is outside the European Economic Area. It could be 50p to £1.50 per transaction if you use one of those cards, making it a very expensive cup of coffee."

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