Is it better to pay by sterling or local currency when abroad on holiday?
Holidaymakers using their bank card abroad often come across a confusing question.
When out using the card such as at a restaurant, the server will normally ask how they will pay.
This means whether to use sterling or the local currency such as euros or dollars.
Depending on what is chosen can change the huge amount of fees that are charged.
Travellers should always ask to pay in the local currency.
This is because then the UK bank card is doing the conversion to pounds which is a much better rate as it uses UK rates.
However, if choosing to pay in sterling, then the country uses its own rates.
This is always much worse, even compared to the UK rates.
If paying by card when on holiday, travellers should always use local currency to avoid huge fees
It also makes a difference what card is being used as some debit cards can have high fees
Martin Lewis explained on his Money Show Live that even the worst UK rate was still better than the overseas rates which are often unchecked.
This can be related to any currency, even euros or dollars.
It also makes a difference what card is being used as some debit cards can have high fees.
He also revealed that debit cards such as Halifax, Santander, Bank of Scotland, Lloyds and TSB all charge £1.50 a time to use them.
Therefore it may actually be better to use a credit card when paying, not a debit card.
Whilst it depend what bank card travellers use, local currency always ensues lower charges
However, the new Monzo card has no fees when abroad, so it is recommended to use this when abroad and to pay in the local currency.
For anyone wanting to get their hands on one, there is a current wait list of over 15,000 people.
Yet there are other cards that can be good to use when paying abroad.
Santander and Barclaycard came out on top.