Managing your finances when you're abroad on your holidays

Written by Eesha Mohindra, Money Analyst from

managing your finances on holiday

At the beginning of the year we were receiving a lot of emails from concerned users of the website saying that their banks were now charging them for using their debit or credit card abroad. 

At MSE towers we knew that this was  because new regulations meant that banks now had to clearly show their charges as a breakdown on the customer’s statement. Previously, if you spent £100 in a shop while on holiday your bank statement would just show your payment as £103.99, but now it will show £100 plus a separate £3.99 ‘overseas fee’. 

We’ve all been there, trying to save our pennies for a family holiday, but all that hard work could be undone by simply using the wrong type of plastic. Unknowingly, you could be adding a whole load of fees onto the cost of your holiday that you haven’t even budgeted for. Our research has found that on an average family holiday an extra £60 in charges could be added to a £1,000 spend – which could have been spent on a meal out! 

What’s worse is that the debit cards that charge the most to use abroad are from the big banks on the high street that most of us use - Halifax, Santander, TSB, Lloyds and Bank of Scotland. Every time you spend on these debit cards you’ll be paying an extra £1 - £1.50 on top of 2.75% - 2.99% ‘load fee’ of the amount. So say you were buying something for £100, it’ll actually cost you £103.99 if you paid with your Lloyds, TSB or Bank of Scotland debit card or £104.25 if you paid with your Halifax debit card.

However, not all debit cards charge this. If you have a Norwich and Peterborough Gold Classic Debit card or a Metro bank debit used in Europe your £100 purchase will still be £100. To see what your debit or credit card charges abroad see MSE’s how good is your current plastic tool.

So if you’re going abroad this summer the best way to spend abroad is by using specialist credit cards that don’t charge you when you use it abroad. Halifax Clarity is our top pick as it’s got the lowest fees when used overseas – your £100 purchase will only cost you £100. If you are withdrawing cash from an ATM however when you’re away, you’re charged interest on the amount you withdraw (around £1 for every £100 withdrawn) from the day you withdraw to the day you fully pay this back (though this interest still beats other fees on other cards). Another decent pick that doesn’t have a load fee is the Post Office credit card, but this does charge £3 (min 2.5%) if you are withdrawing cash from an ATM. 

If you aren’t one to use cards, and would prefer to exchange your cash - that’s fine. But whatever you do don’t get your travel money from an airport bureaux, this is the worst way. Instead pre-order your currency online and pick it up from the airport - it could save you an extra £90 to a €1,000 conversion. Check out TravelMoneyMaximiser to find the best rates.


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