IMPORTANT UPDATE: 14 May 2015, 10.10am: Unfortunately Travelex has closed its Supercard to further applications as it says it's hit its cap (even though it initially didn't give us one). Demand for the card was massive after we featured it in this week's email. We sent all our emails out by early afternoon on 13 May – well before Travelex neared its cap. If your email arrived after Supercard reached its limit, it may be because internet service providers sometimes delay emails. For full info see our Supercard guide.
The Travelex Supercard* launches today – it's a pilot of the first ever free plastic with near-perfect rates in every country – euros, dollars & more. There's no exchange rate fee, no cash withdrawal fee and no credit check, so anyone can get one (you need a smartphone/tablet).
In the past I've championed the use of specialist overseas credit cards for when you're on holiday. That's why Travelex gave us an exclusive heads-up on this, so we've had time to analyse it. And this innovative new kid on the block does take a bit of explaining. It isn't a credit or debit card, it's, er, well...
1) Urgent. New cheapest way to spend abroad.
The free Travelex Supercard* is technically a prepaid card, but you don't load it with cash. The scheme is a pilot – there's no published cap on numbers – but it may close it once it has enough people, so if you want it go quick. Here's how it works.
- a. Apply for the card via an app. Go to Supercard (Apple)* or Supercard (Android)* and register, then you are sent the physical card to activate.
- b. Link it to your existing debit or credit card. Use the app to connect it to your debit or credit card (Visa/MasterCard, not Amex) and see your pin.
- c. Spend abroad on it or withdraw cash like any normal card. It converts the foreign exchange at near-perfect rates – technically, that day's same Visa Wholesale Rate as banks get – but without adding 3% on top as they usually do.
- d. It immediately charges your bank account or credit card, but IN POUNDS. At its top exchange rate and without fees abroad, even for ATM withdrawals.
- e. This is a pilot scheme: It should be accepted anywhere Visa is, but it is brand new, therefore totally untested – so you're pioneering it. While on paper it should be great, take a back-up with you. And of course things can change, and if they do, we'll let you know via this email.
Here's some more key info on it...
- It's free and there's no credit check. So anyone over 18 can get it.
- You can actually link it to up to five cards, and switch between them.
- On your debit or credit card statement, this just counts as UK spending, even if you take out cash abroad.
- If you link it to a cashback or rewards credit card, the card firm sees it as UK spending, so you should still get rewards. See Top Cashback Cards or Top Rewards Cards guides for info (remember no Amex, though).
- It does charge fees if you pay/withdraw cash in pounds – so never use it here, and if asked if you want to pay in pounds or euros abroad, say euros.
- Supercard converts at the 'Visa wholesale rate', whereas the top pick Halifax Clarity below uses the 'Mastercard rate'. These rates can differ, and Mastercard's tends to be marginally better. So if you already have it, use Clarity for spending due to the rate, but Supercard for cash withdrawals as there's no cost.
Full info in our new Supercard - Cheap Spending Abroad guide including how Travelex can afford to offer this.
2) Save £100 per €1,000 spending.
Post-election the pound's jumped back to a near-seven-year euro high and is up in dollars too. Yet spending the wrong way can kill this gain and more.
The cost of €1,000 (based on five ATM withdrawals of €100 each, the rest spending in 20 transactions)
- On the Supercard: £719
- On a specialist credit card repaid in full: £723 (see point 3)
- Cash, via UK's cheapest bureau (pick up in London): £728 (see point 4)
- Cash from the Post Office: £747
- Using a debit card from hell (Halifax in this case) £799 (see point 7)
- Change at airport (not pre-ordered): £819 (see point 5).
3) Cheap spending abroad AND purchase protection (a good backup too).
Supercard's key advantages over the old winners – top overseas credit cards – are that anyone can get it and it has no ATM fees. Yet it loses in one area – spend via Supercard and you don't get Section 75 protection.
Pay for something costing £100 to £30,000 on a credit card and the card firm's jointly liable with the retailer if things go wrong. This is very useful when abroad, as taking things back is tough. It's also good protection when buying from overseas websites. Full info: Section 75 guide
Yet you only get this if you pay directly, eg, not via PayPal, on a credit card (not debit card). Using Supercard, even linked to a credit card, doesn't count.
- Get a top specialist credit card as backup and for big purchases abroad. These cards have the same near-perfect spending rates as Supercard, though if you withdraw cash, there can be fees or interest. Use our cheap travel credit card eligibility calculator to find which you've the best odds of getting.
Top pick's Halifax Clarity's* due to low ATM charges and the fact it's a Mastercard, followed by Post Office* (Mastercard). Saga* (Visa) & Nationwide'sSelect* (Visa - for its customers only) match Supercard on spending. Always repay IN FULL to minimise the 12.9%, 11.9%, 17.8% & 15.9% rep APRs. Full info: Cheap Travel Cards (APR examples)
4) Find the best rates for foreign cash in seconds.
If you want some foreign cash in your pocket, our TravelMoneyMax holiday money comparison tool compares over 40 online bureaux to show which gives best rates.
There are two 'sales' on this week (where rates are temporarily boosted). The TravelMoneyMax tool updates with their rates during sales so you can compare. Worth noting: often, small bureaux up their rates via the tool to match.
- Travelex online: All bar euros, Thu 11am-1pm; euros Fri 11am-1pm.
Post Office online:euros, US & Canada $ & a few more, Sat 8am-Tue 8am
5) Never change cash at the airport, or at least pre-order.
Rates are usually dismal as they know you're a captive customer. At the very least if you're out of time, you get better rates if you order online in advance for airport pick-up (you can do this with the Travelex sale above).
6) Top prepaid cards: lock in today's rate.
These are like an electronic form of foreign cash. There's no credit check. You just load it with cash before you travel, then use it to spend. If you lose it, your cash is protected.
Unlike all the cards above, here you usually get the rate on the day you load it up rather than when you spend. So if you think the rate's strong now and are happy with it, you can bag it, but of course it can work against you (see Martin's The pound's hit €1.40. Should I buy now? analysis).
Our top pick's based on rates and fees are the FairFX euro* and FairFX dollar* cards, specifically via these links, where they're free. Go direct and you usually pay £9.95. Plus. if you're loading £500+, you get an £8 discount. More picks and info for other currencies in Cheap Prepaid Travel Cards.
7) Beware the DEBIT CARDS FROM HELL.
The worst way to spend abroad is often on your everyday bank account card (OK, well, the real worst is if you pay hideous interest on a credit card, but I'm making a point here). Not only do they add the normal 3% exchange rate fee, they also charge up to £1.50 each time you spend.
So, say you spend £5 on the card. Using one of these cards, plus load and spending, it can cost £6.65 – which soon adds up over a holiday.
THE DEBIT CARDS FROM HELL?
Bank of Scotland | Halifax | Lloyds | Santander
TSB | NatWest/RBS (hell only for small spends)
Of course, connect these to a Supercard and it's free. If not, ANY other card, including credit cards (if repaid IN FULL) are cheaper to spend on. Check how much your debit or credit card charges.
8) Cheapest debit card abroad.
The Norwich & Peterborough Gold Classic account's debit card has the same near-perfect exchange rates as the credit cards above, and no ATM fees. To get it for free, you'll need pass a credit check and pay in £500/mth (or keep a min £5,000 in it). Alternatively, Metro Bank's gives the same top rates, but only for European spending.
Yet if you're going to switch bank there are more lucrative incentives, such as a free £150 for switching or up to 5% interest and as the Supercard or a credit card give similar cheap spending abroad, why bother? Admittedly, there are ways to jemmy the system to do it just for this, but that's a hassle.
9) If asked "Do you want to pay in pounds or euros?" – SAY EUROS.
When paying or even withdrawing cash from an ATM, these days they often ask if you want to pay in pounds or the local currency. In general, always pay in the foreign currency. If you select pounds, the overseas store/bank is doing the conversion, and rates tend to be awful. Full info in my 'pay in euros?' blog.
10) Say it once, say it loud, 'I've an overseas wallet and I'm proud.'
Ever since I first wrote my take a peek inside my travel wallet blog, an ever-growing number of people have outed themselves as travel wallet nerds.
It may be low-tech, but it works: get a 2nd (cheap) wallet for all the things you only use abroad, from specialist plastic to a free EHIC card. For what else should go in there, have a read of the blog.