You won’t even see the fees being added
Martin Lewis has advice for stretching your holiday money
Most holidaymakers assume using their normal bank card abroad is fine. But Martin Lewis says a simple switch to a specialist card could save you from paying an extra 2.75% to 3% on every single purchase – a hidden fee that quietly adds to your bill without you even noticing.
In a clip shared on This Morning’s official TikTok, the MoneySavingExpert founder explained how most high street banks add a “non-sterling exchange rate fee” when you spend abroad. Ignore it and a £100 purchase effectively costs you £103. Switch to one of the specialist cards he recommends, and you get the same near-perfect exchange rates the banks use – without the markup.
Martin started by explaining what happens when you spend on plastic overseas. “Your bank gets a near perfect exchange rate on the day – the same as what’s called the spot rate, the city market rates. When you spend on your card abroad though, normally the card company adds what’s called a non-Sterling exchange rate fee of between 2.75 or 3%,” he said. “So your hundred pounds worth of euros cost you £103.”
The solution, he explained, is using specialist cards. “With the specialist cards, they don’t have that. So you get the same near perfect exchange rates that the banks or the card firms do.”
As for which cards to choose, Martin noted there are quite a lot available now. He judges them on the cashback they give you. The Barclaycard Rewards credit card is currently giving 0.25% cash back on spending in the UK and abroad. “So you get perfect exchange rate and cashback,” he said.
He added a crucial warning for anyone using a credit card: “Only do this if you’ll pay it off in full at the end of every month, or there is interest. That will credit score you to get it.”
For those who prefer a debit card or don’t want to undergo a hard credit check, Martin offered two alternatives. “The easiest one to get is the Chase card, which you can apply for without switching banks and only does a soft credit check, so it doesn’t mark your credit file, and virtually everybody can get it,” he said. It offers near-perfect exchange rates, no ATM withdrawal fees, and some cashback on UK spending.
Alternatively, for those willing to switch banks: “First Direct, if you’re willing to switch bank to it, will give you a near perfect exchange rate fee debit card and pay you £175 quid if you switch bank to it.”
A spokesperson for travel experts Lapland Famille said: “When spending abroad, choosing the right payment method makes a real difference. Specialist cards often work out far cheaper than standard bank cards. And if you’re ever asked to pay in pounds or the local currency, always choose the local currency – paying in cash locally is another good way to avoid hidden conversion fees.”
With no need to switch your main bank account for the easiest option, Martin’s advice shows that cutting the cost of spending abroad may be simpler than many travellers think – as long as you pick the right card before you go.