Columnist Martin Lewis: Get perfect exchange rates every time

The Money Saving Expert Martin Lewis
The Money Saving Expert Martin Lewis
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A simple New Year’s resolution for you. If you plan to go abroad next year, don’t pay more to pay. Far too many people hike their own costs by spending the wrong way when their feet land on sun-drenched foreign shores.

So if you’re heading off on a festive escape or planning to trip abroad in 2014, I’m going to explain how in a few clicks you can give yourself perfect exchange rates in every country, every time you go.

Permanently holster unbeatable exchange rates. Spending abroad on plastic is usually costly, as banks get perfect rates but then add a hidden 3% load onto what they charge (so spending £100 worth of dollars costs us £103).

Yet a few cards are marketed as super-cheap abroad in the hope you’ll also use them here, where they’re not always so cheap. These specialist, no annual fee, credit cards are load-free worldwide, smashing bureaux de change, giving permanently unbeatable rates everywhere you use them. In other words, spend £100 worth of dollars and it costs £100.

So I suggest you grab one, just for use abroad, and – if you’re a nerd like me – stow it in your overseas purse or wallet (alongside an EHIC card and any leftover cash from past travels). Yet the key rule is to ensure you always repay IN FULL, preferably by direct debit to minimise any interest.

My top pick is’s Clarity card, which has the lowest ATM fees (even so, spending on the card beats cash withdrawals). If you fail to fully repay it’s 12.9% representative APR (but remember this is charged on ATM withdrawals, even if you do fully repay).

Yet if you’ve a (over-50s) (11.9% rep APR), (17.8% rep APR) or (15.9% rep APR) or Santander Zero credit card, then as these are load-free worldwide anyway, it’s not worth a new application. Full best buys, including load-free debit cards, at

Try my free Overseas Cards Eligibility Checker at, which shows your odds of acceptance for most cards without impacting your creditworthiness – allowing you to apply for the one you’ve the best chance of getting.

Poorer credit scorers still have an option, though. The easier-to-get Classic Extra card is load-free overseas, and also pays 0.5% cashback on all spending – a useful double purpose.

Do watch out for its 34.9% rep APR if you fail to repay in full. It’s worth noting you’ll also be charged this (and a fee) on cash withdrawals even if you fully repay, so err towards spending on it, not ATM withdrawals.

Top prepaid cards. You load one up before you travel, then use it like a debit card. If you lose it, your cash is protected. However, unlike the top credit cards, you get the rate on the day you load, not when you spend, so currency fluctuations can hit you.

My top pick cards, based on low fees and best rates, are FairFX Euro and FairFX Dollar - usually they’re £10 but go via the links at comparison site and they’re free, provided you load at least €60 or $75.

These charge an ATM fee, so if you need to withdraw cash regularly, consider the ATM fee-free card. You can choose a euro, dollar or ‘global currency’ card.

NEVER get cash at the airport. Airport and ferryport bureaux know you’re a captive customer, so they often give terrible rates. If you’ve left it too late, at least order online for airport pick-up, as you usually get a better rate. Use my comparison tool which finds you the very best deal before you go.

Beware buying foreign cash with credit cards. Buy currency from a bureau de change on a credit card and it counts as an overseas cash withdrawal. That means you usually pay £3 per £100 fee, plus interest, even if you clear the card in full. Some bureaux make it a triple whammy, adding 2-3% fees too. Thankfully debit card charges for this were stopped last year.

Warning – do you have an overseas DEBIT CARD FROM HELL?

Bizarrely, ordinary bank debit cards are oft the worst way to spend abroad. Not only do they load exchange rates and add ATM fees - the debit cards from hell below effectively fine you £1-£1.50 each time you spend abroad. Name and shame: Santander, NatWest/RBS (avoid for smaller purchases), Halifax, Lloyds and TSB.

Buy something costing £5-worth of euros with one of these cards, and with load and spending fine, it costs you £6.65.

Foreign shops/banks asking “want to pay in euros or pounds?” If you’re using a card abroad, sometimes you’ll be asked if you want the transaction to be in pounds or the local currency. In a nutshell, pay in the local currency (eg, euros) not pounds.

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