This content originally appeared in the MSE weekly email on 8 July 2015.
With the Greek crisis, and a potential Grexit, euro weakness means the pound's holding steady above €1.40, so holidaying in Europe's at its cheapest for years. The dollar's decent at $1.54 – but less than 2014's six-year high.
Yet these are City rates, bureau de change tourist rates are usually much worse, yet...
1. New. £60 of euros for £50 prepaid card.
With prepaid cards, you load cash on them, then use like a debit card. There's no credit check so anyone can get one. Full help and best-buys in Cheap Prepaid Cards, yet intro bonuses on two new cards effectively mean you get an even better rate than the City.
- Perfect rates and £5 extra on £10+. The new Revolut prepaid Mastercard* gives the perfect interbank rate for euros, dollars and many others for the first year. That's unlikely to be sustainable, so if it can't find a way to make other revenue after (eg, cross-selling) it may add a fee (it'll notify you if so). Also, there are no ATM or spending fees.
You sign up on its app (Apple/Android) and the first 25,000 who use invitation code MSE will get an extra £5 added when loading £10+. Full analysis: Revolut
- Urgent: £10 extra on £50+: WeSwap prepaid Mastercard* works in dollars, euros and others. The first 4,500 people via our link get two perks:
a) An extra £10 of currency when loading £50 or more.
b) A better rate. Its best rate is if you can wait a week for your currency to convert, normally that's the perfect interbank rate + a 1% fee, but for those signing up via our link it's wiping this fee for the first year.
Spending's free, but there's a £1.10-£1.70 fee for sub-£200ish ATM withdrawals. Sign-up is via the website, but you'll need an app (Apple & Android) to use it. Full analysis: WeSwap
Important prepaid card info:
- a) These are new, untested cards to us. They should work but there's a small leap of faith here. For fully tried and tested, FairFX Euro* and FairFX Dollar* are free via these links if you load £50+ and give £8 on £500+.
- b) These usually arrive within 10 days, but can take longer.
- c) To be safe, only load cash on the cards if you'll use them soon.
- d) If the prepaid card provider goes bust, your money's ringfenced at a bank. Revolut & FairFX are Barclays, WeSwap at Barclays/NatWest.
- e) Unlike the others, WeSwap's isn't UK-regulated, the card's issued by IDT, regulated in Gibraltar – so you're ultimately reliant on its regulations to protect you (a lot must go wrong though before this matters).
2. Near perfect rate in EVERY COUNTRY, EVERY TIME, and no hassle.
Specialist cheap overseas credit cards are usable in almost any country, and like any credit card, you just pay each month after you've spent. So pop it in your overseas wallet and use when needed, ensuring you repay IN FULL each month to minimise interest.
Top pick is the Halifax Clarity* Mastercard credit card. Unlike most debit & credit cards, it doesn't add a 3% 'non-sterling transaction fee', so you get the same near perfect Mastercard (which usually pips Visa) wholesale rate banks do for the day. If you don't repay it in full it's 18.9% rep APR.
It's not the only no-exchange fee card, and as you have to pass a credit check to get one, try our overseas cards eligibility calculator which shows which you're most likely to get without hitting your credit file. Full help: Top Overseas Credit Cards guide (APR Examples)
3. Which wins? The top prepaid card or top credit card?
Normally it's credit cards hands down as the rate is better, but the two prepaid cards above may pip credit cards (but even on £1,000 it's likely to be by pennies). Here are the key pros and cons:
- Prepaid cards need loading up, credit cards don't. So credit cards are simple, as you use them when you need, with no inactivity fees.
- Prepaid rate is when you load, credit card when you spend. That means with prepaid cards you're at the mercy of currency fluctuations – which can make you a winner if the rate gets worse, loser the other way round.
- Credit cards give good rates in every country. With prepaid cards they're usually only good in the currencies specified.
- Credit cards have Section 75 protection, prepaids don't. Pay for something costing £100-£30,000 on a credit card and the card firm's jointly liable with the retailer if things go wrong – useful abroad or on overseas websites as taking things back's tough. Full info: Section 75
- Credit cards charge interest on cash withdrawals even if you repay in full. Where possible spend on them rather than withdraw cash to avoid this.
4. Find the best rates for foreign cash in seconds.
If you want cold, hard cash, our TravelMoneyMax holiday money comparison tool compares over 40 bureaux to find the best rates.
5. Save £100 per €1,000 spending.
So how do all these methods compare? The cost of €1,000 on Monday (based on five ATM withdrawals of €100 each, the rest spending in 20 transactions):
- Using top prepaid card (in first year): £709
- Using specialist credit card: £715 (more than prepay due to cash withdrawal interest)
- Cash, via UK's cheapest bureau (pick up in London): £719
- Cash from the Post Office: £732
- Using a debit card from hell: £767
- Change at airport (not pre-ordered): £801
6. What does your card charge? Beware the debit cards from hell.
If you don't have time to get a new card before you go away, use the how good is your current plastic? checker so you can see what your card charges.
The worst are the Overseas Debit Cards From Hell. Not only do they add a non-sterling transaction fee and an ATM fee, they also charge up to £1.50/time you use the card to spend overseas.
DO YOU HAVE A DEBIT CARD FROM HELL?
Bank of Scotland | Halifax | Lloyds | Santander
TSB | NatWest/RBS (hell for small spends)
7. I'm not going yet, but at €1.41, should I buy now?
It's a big question, for an answer read my Worth snapping up €1.41 as the Greek crisis continues?
8. "Do you want to pay in pounds or euros?" – SAY EUROS.
When paying or even withdrawing cash, these days they often ask if you want to pay in pounds or the local currency. In general, always pay in local currency. If you select pounds, the overseas store/bank does the conversion, and rates tend to be awful.
Full info and explanation in my 'pay in euros?' blog.
9. I'm going to Greece. Help.
In most tourist spots we hear things are still working as normal. Tourists can take cash from ATMs (provided they still have cash) and most stores still accept cards for payment. For safety though, take more than one payment method and enough euros for the whole holiday.
For full info our Greek holiday worries FAQ and video.
10. What's in your overseas wallet?
Are you part of the 'overseas wallet or purse' club? I most certainly am. After all, there are some things you only need when abroad. The first are specialist credit cards – these tend to be pretty poor for UK use, so mine waits in the wallet till I go away.
It shouldn't be lonely. There's also a free EHIC card for emergency medical issues in Europe, my ESTA number for US travel, leftover euros, dollars and more – feel free to take a peek inside my overseas travel wallet.
Far more help in our 15 Cheapest Ways To Get Travel Money guide.