Normally in the Money Vault, Martin makes celebrities open up their wallets, but the tables have now turned.
A proud nerd, Martin boasts he has a special wallet just for travelling overseas in order to get the maximum bang for his buck and ease.
Weapon 1: Plastic that gives unbeatable exchange rates everywhere
When you spend abroad, you want to pay for what you buy. Yet most people also pay for what they pay to buy. To show the extent of this, here's how much spending €1000 cost last week in pounds:
- Spend using specialist credit card: £800.
- Via UK's cheapest bureau, need to pick up in London: £804.
- Change money at the Post Office: £829.
- Spend on debit card from hell (40 transactions): £882.
- Change at airport (Heathrow T1 Travelex, not pre-ordered): £890.
That's why I have a specialist overseas credit card, which gives me the best exchange rates in every country, every time.
But as these cards are only really worth it overseas and not in the UK, they sit in my travel wallet waiting 'til I go away.
Most credit and debit cards add a 3% load, so spend £100 of euros and it costs £103. Yet a few specialist (no annual fee) credit cards are load-free worldwide, so £100 of euros costs £100. It means you get the same, near-perfect rate as the banks, every time and everywhere you use them. This smashes every other method, including top bureaux de change.
For full help on this see Martin's full Cheapest Way To Spend Abroad guide. All load free cards give perfect rates on spending, but my top pick card's the Halifax Clarity as it has the lowest ATM charges. Of course to make these work, ensure you always repay IN FULL, preferably by direct debit, or the 12.9% representative APR interest cost dwarfs any gain from the better exchange rate.
If you are struggling to be accepted for the Halifax Clarity, the Capital One Classic Extra card accepts some with lower credit scores, but its rate is 34.9% representative APR, so definitely ensure you pay in full.
Do be aware that for ATM withdrawals (not spending), you'll pay a month's interest even if you repay IN FULL eg, for Halifax it's c.£1 per £100. So it's better to spend on these cards than to withdraw cash and spend that, though with Halifax, even with this it's still likely to beat most bureau de change. Capital One's cash withdrawal fee on the other hand is very expensive.
If you prefer a cheap debit card, the only one widely available that's load free is Norwich & Peterborough's Gold Classic current account and it has no ATM fees either. You'll need a minimum £5,000 in it, or pay in £500/month or there's a £5/month fee. But frankly I would use a credit card anyway, as there are better perks available for switching bank account so getting this account just for the debit card seems a little OTT.
Alternative weapon: The top prepaid card overseas
Here, you load with cash before you travel, then use like a debit card. If you lose it, your cash is protected. You get the rate on the day you load/buy, not when you spend, so currency fluctuations may mean you get a worse deal (or a better one).
Recently launched is the Ukash Travel Money Prepaid Mastercard, which charges no fees for spending or for withdrawing cash abroad. It's free to get, and free to operate - so you won't be charged to top it up. It seems to have good exchange rates, but as it's new I have no feedback on it.
Until it launched, my top picks were FairFX Euro and FairFX Dollar, which both usually cost £10, but via some comparison sites are free if you load over £50 worth of currency.
The FairFX cards do however charge a fee for cash withdrawals, so if you need to withdraw cash more than spend, the Caxton FX card has no fees.
Weapon 2: A valid, free EHIC card
The European Health Insurance Card (EHIC) entitles you to treatment by state hospitals and GPs in the EU, plus Iceland, Liechtenstein, Norway and Switzerland. Many wrongly assume this means free treatment. In fact, you pay what the natives pay. So if it's free for them, it's free for you, if they pay, you pay.
But there are four golden rules here:
- Check the date is valid - many carry out of date cards.
- Every member of your family, including children, need their own card.
- You need to carry it WITH YOU to be valid, don't leave at home or in your hotel room.
- This card is FREE, you should never pay for it. Beware shyster sites that charge or offer you a 'fast-track' service, it's nonsense. Just go to the NHS's website and get it there
Weapon 3: A few euros and dollars
My wallet's also packed with unspent small euro and dollar notes. After all, why pay to change back £30 or £40 of foreign currency? Leave it sitting for next time.
If you do feel the need to have some cash with you, the worst sin is to leave it until the airport. Bureaux there know you're a captive customer and give hideous rates. If you've already left it too late, at least pre-order for airport pick-up first, when rates are boosted.
I shift my driving licence into my travel wallet when I go away within the European Union, but it's worth noting that for those driving outside the European Union, it's also either recommended or compulsory in over 100 countries to have an International Driving Permit as well as your UK licence. This short link - http://bit.ly/6GOg4S - shows the AA's country-by-country guide to what's needed. The cheapest way to get one is at the Post Office for £5.50. Again, beware shyster sites.
I also put a photocopy of my passport in my travel wallet, just in case, as well as my travel insurance details.