Martin Lewis summer holiday warning to those with debit or credit card | Europe | Travel

Martin Lewis has spoken of his rule for anyone going away this summer – and used £100 worth of money to explain why. The personal finance guru appeared on his BBC podcast to give a warning to any UK travellers – and said it’s easy to fall victim to a ‘sneaky fee’.

Mr Lewis explained that people need to be wary – and take action before they go on holiday. He said: “If you’re going abroad this summer, it’s important to understand what happens when you pay on plastic. Now, you see, your credit card company or bank, if it’s a debit card, will get a near-perfect exchange rate on the day. But most of them add what’s called a non sterling exchange rate fee of around 3%. So, what that means is if you buy something that costs £100 worth of Euros on that day’s exchange rate, you will pay £103 for it plus withdraw from an overseas ATM and you can face extra charges too and interest even if you pay your credit card off in full.

“And some debit cards give you an additional cost for spending. That’s why by far the cheapest thing to do is to get yourself one of many specialist overseas credit or debit cards. They don’t add that non- sterling exchange rate fee. So if you buy something that costs £100 worth of euros or £100 worth of dollars or whatever currency it is, it will only cost you £100 and the best of those don’t have ATM fees either and some even give you cash back on your spending. All in all, that means that smashes the pants off using a bureau dash. Specialist credit or debit cards are the way to go forward.”

Personal finance guru Mr Lewis also issued an urgent warning to anyone passing through an airport this summer. Holidaymakers have been cautioned that they will be making a costly error if they make a particular decision when they are ‘captive custom’.

Travellers heading abroad this year are already anxious about potential price hikes and disruption Mr Lewis, speaking on ITV’s This Morning previously, made clear that attempting to obtain cash while at the airport is a serious misstep.

He told presenters Ben Shephard and Cat Deeley that many people like to carry cash for purposes such as tipping – while others prefer using it to manage their spending more effectively. He said: “The worst place to get your cash is at the airport or at the ferry port or anywhere like that because they have your captive custom and the rates are horrendous”.

“ The best thing to do is to use a couple of travel exchange comparison sites online. Now, the thing is, you have to be careful. It’s a combination of the exchange rate and the fee. So what exchange rate are they giving you? What fee are they giving you? You want that all combined. And that’s what the comparison sites will do.

“You’ll just say, ‘I want £600 worth of dollars. Who’s going to give me the most dollars for my £600?’ And that’s the way that they will work. So, that’s by far the simplest way to do it. Just get yourself on a comparison. But don’t wait till you get to your destination.”

He explained that comparison sites will examine perhaps 50 or 60 providers, whereas if you wait until arriving abroad the available options are unlikely to offer competitive rates. He said: “If you go regularly to the same price abroad and you know there’s a little fella and you know and he gives you great rates and they’re much better than the ones at home then it’s fine. But if you don’t have that specialist knowledge, do the comparison, take the cash before you go.

“I mean also if you really do want cash, if you got a specialist overseas card, you know you got a Chase card or something just put it in the cash machine abroad. There’s no fees and you get the near-perfect exchange rate. So that’s another way to get cash.”

Mr Lewis also highlighted that anyone spending money in European destinations such as Spain, Greece or France should always make one crucial decision when it comes to paying – or withdrawing cash. He pointed out that if people have gone to the trouble of arranging a card to work overseas, they’re actually adding substantial amounts onto their bills by making the wrong choice when asked whether to pay in euros or pounds.

He said: “If you spend, if you go to a machine abroad or you go to an ATM and you’re in Europe, let’s say, or if it says, do you want euros or pounds? What it’s actually saying is if it’s euros, do you want your card to do the conversion? Your card company. If it’s pounds, we will do the conversion. for you and then charge your card. So, that’s the decision. Now, we’ve just talked about getting a specialist overseas card that gives you a near-perfect rate.

“Well, you want them to do the conversion. That’s why you got the specialist overseas card. And actually, even if you haven’t got a specialist card, even the bog standard pretty pants cards here tend to be better than the shop abroad doing it where they put a massive we can be six or 7% on the exchange rate. The same with overseas cash machines, which can also add a fee on top, but what happens is basically you put, let’s say, you’re in a cash machine abroad, and it’s saying pounds or euros, and you say, as I will absolutely do. I go I want euros please and it says are you sure you’re that we won’t do the conversion are you actually yes I want euros are you sure what are you doing.

“They are desperate to persuade you to let them do the conversion because they make a lot of money from it it’s the opposite of what they’re trying to push you to do is what you want to do so very simply if you’re in Europe and you paying on a card, paying euros if you’re in America, pay in dollars if you’re in Vietnam.”