Martin Lewis ‘do not use pounds’ warning to everyone going on holiday | Personal Finance | Finance
Money expert Martin Lewis is urging people to never use pounds when going on holiday in Europe – but to pay in Euros instead, even on card.
Thousands of Brits up and down the UK will be jetting off on their summer holidays abroad this July and August, especially now that schools have broken up.
But Martin Lewis says those heading to Eurozone countries which use the Euro, such as France, Spain, Italy and Greece, must always pay in Euros when abroad, and never use Great British Pounds Sterling, to give it our currency its proper name.
Martin said that holidaymakers can often find themselves stung when going abroad by deals that sounds too good to be true, such as 0 percent commission on spending or withdrawals in GBP.
Martin told his followers via his MSE website: “I couldn’t believe my ears. While filming in southern Spain for the new series of my show, the producer told me he’d found a cash machine offering 0% commission if you chose to withdraw in pounds. In theory, that’d mean PERFECT exchange rates.
“I smelt a rat.”
Martin said that if you use a debit or credit card in Europe, you’ll usually be given two choices: pay in Euros, and the credit card company or bank will automatically convert the exchange rate, plus a 3 percent surcharge, so £100 of spending would cost £103, or pay in pounds.
If paying in pounds, the foreign bank or vendor does the exchange for you rather than your card company or bank back home. Unfortunately, 0 percent commission is not always zero percent commission because the foreign bank or vendor has set its own exchange rate which is not necessarily true to the real exchange rate, and effectively buried its commission in there.
Martin found when withdrawing at a cash machine in Spain: “On that day it was charging £91.50 for 100 euros. But if you’d actually got it at the perfect rate on the day, it would’ve been £86.50 – a huge difference, even on a relatively small withdrawal.”
The best way to spend abroad is by using a bank debit card or credit card which offers true 0 percent commission on foreign spending, such as a Chase card. Some mainstream high street banks also offer this as a perk on some current account debit cards.
Martin Lewis says his ‘golden rule’ is: “If using a card and you’re asked whether you want to pay in pounds or pay in local currency (eg, Euros) ALWAYS say the local currency (the same almost certainly applies US dollars when in the States or other currencies elsewhere too).”
