Mastering Overseas Spending: A Guide to Smart Money Management
Overseas spending can come with high interest rates and additional fees when using credit and debit cards. Navigating through these financial challenges is crucial for savvy travellers looking to optimize their money management during international trips. Here are some insights and tips, with a focus on traveller's money exchange deals in the UK:
A travel credit card offers a second layer of financial protection during your journey. Section 75 of the UK consumer protection law provides legal responsibility for credit card purchases between £100 and £30,000. This ensures a higher chance of reimbursement if something goes wrong overseas.
To avoid foreign transaction fees, opt for credit cards that waive such charges, offering potential rewards like cashback on grocery shopping when used for transactions abroad. When selecting the right credit card for travel, carefully consider your specific requirements, including transaction fees, exchange rates, interest on cash withdrawals, and cash withdrawal fees. When it comes to cash withdrawals and currency considerations, it is advisable to refrain from making cash withdrawals with your travel credit card to prevent incurring additional charges. Opt for paying in the local currency of your destination to secure a more favourable exchange rate, and inform your credit card company in advance about your travel plans to prevent unexpected card blocks for security reasons.
In the preference between credit and debit cards for international use, debit cards typically take precedence due to their lower fees and more competitive exchange rates, whereas credit cards often entail higher fees for overseas expenditures.
As an example of a recommended option, consider utilizing Revolut, a prepaid Visa card designed for international transactions. Revolut is recognized for its convenience and flexibility, offering features tailored to meet the specific needs of travellers. By carefully considering these factors and exploring options such as Revolut, travellers can make informed decisions to optimize their overseas spending experience, minimizing costs and maximizing benefits. Revolut, a business founded by Nikolay Storonsky and Vlad Yatsenko. When using a Revolut card to make purchases abroad, there are no additional costs. When spending money overseas, they provide substantial savings on transaction costs and exchange rates.
Several digital banking options in the UK offer competitive deals and features, catering to the evolving preferences of users. Monzo stands out as a popular choice, known for its user-friendly app and features such as fee-free spending abroad up to a specified limit, coupled with real-time transaction notifications. Starling Bank, another well-regarded digital bank, offers fee-free spending and withdrawals abroad, with their app providing detailed insights into users' spending patterns. N26, a European digital bank available in the UK, distinguishes itself by providing fee-free spending in foreign currencies, offering a seamless banking experience through its mobile app. TransferWise, now known as Wise, is renowned for its international money transfer service and also provides a borderless account, allowing users to hold money in multiple currencies for fee-free international spending.
Curve takes a unique approach by allowing users to link multiple bank cards to one Curve card, providing features like fee-free foreign currency spending and the flexibility to switch between accounts for transactions. Atom Bank, though not as travel-focused, offers a mobile-only banking experience, including savings accounts and mortgages. Meanwhile, Bunq, a European digital bank, allows users to open multiple bank accounts with different currencies, featuring fee-free spending and real-time payment notifications. These digital banking options provide a range of services, from fee-free spending abroad to unique features like multi-currency accounts, catering to the diverse needs of users seeking convenient and efficient banking solutions in the UK. Always check the terms and conditions, as well as the latest offerings from these digital banks, to ensure they meet your specific needs. Additionally, new players may have entered the market since my last update, so exploring the latest options is advisable
Article written by: Joy Serena Evenden