I'm such a numpty. I've just been charged £27.50 by Lloyds Bank for booking three nights in a hotel in Amsterdam in euros. I should know better. I know perfectly well how to avoid these fees (which I’ll explain later so you don’t have to pay them).
In my defence, I did think I was paying in sterling. I was on booking.com where the site tells you the price in pounds, for your convenience. When it came to settling up, I was still thinking in pounds and missed the column which explains you’ll pay in euros. So I just plugged in the details of my Lloyds card and hit go.
Doh! Lloyds charged me 2.99% of the spend plus a fixed 50 pence purchase fee. Such a waste of money because I could’ve used my lovely pre-paid Revolut card. This has no transaction fees as well as near perfect currency exchange rates ie the rates the banks charge each other which are far superior to tourist rates. See my blog from last year (still current) on it here.
If you want a more conventional card, Money Saving Expert tips Halifax Clarity (which has a £20 cash back deal at the moment) and Barclaycard Platinum Travel as the best credit cards for foreign purchases. There are no fees for spending or withdrawing cash abroad. But be careful of interest payable on that cash unless you settle your bill pretty much immediately.
In terms of debit cards, MSE recommends those from Metro, Monzo, Starling and Virgin. But you do need to have current accounts with those banks. With the Revolut card, you just top it up from your existing current account with your mobile phone.
I could cancel the booking and attempt to rebook on my Revolut card. However, it took so long to find the right place that I don’t want to mess up the booking by mucking it about. I’ve decided to write it down to experience: I won’t be making the same mistake again.
The whole misadventure reminds me of a story I wrote about this time last year. It was about an SMM who thought she was paying in sterling but ended up being charged an enormous exchange fee by Wizz Air for paying in euros. So watch out for which currency you’re being charged in before you click to buy those tickets or hotel rooms. It could cost you not to!
Remember always to pay in local currency rather than sterling if offered a choice abroad. Usually the retailer uses its own rate which may not be very good. And see our SMM guide to travel money here.