This simple trick will save you money when spending abroad

<img style="width: 500px; height:234px;" src="https://media.caxtonfx.com/img/1100225/travel-money-atm-banner.jpg?width=500&height=234" alt="" data-udi="umb://media/198c1ab67a974982bab6bb078d579116" /> Whether you’re planning on heading to the ski slopes for a Christmas holiday or taking a short city break for the new year celebrations, you’ll need to take some spending money; for most of us, that includes our trusty plastic. Understanding the additional cost of DCC and how to avoid it will save you money when spending abroad. Here's how... <h2>Should I use debit or credit cards abroad?</h2> Taking your debit or credit card on holiday has become second nature for most travellers. However, the wise and travel-savvy will tell you that bringing a <a rel="noopener" href="/currency-cards/caxton-currency-account/" target="_blank">multi-currency card</a> is the most efficient way to spend abroad. Your plastic is a convenient and secure means of payment and, along with your passport, is now an essential piece of travel kit when heading overseas. The problem for consumers is that the fees for using different cards whilst abroad are confusing and can vary widely. Although your debit card may be free to use in the UK, when you venture outside the UK, you’ll typically pay an extra 2.75% to 2.99% non-sterling charge, plus an extra £1.50 to £2.00 per cash withdrawal – so taking £100 worth of Euros from the foreign ATM could set you back almost £5 in charges – ouch! With credit cards you’ll also pay the non-sterling charge plus an even higher cash withdrawal charge at the ATM – in some cases as much as 5%! Hence, so many people now choose a multi-currency card instead as with many there’s no fee for withdrawing from a cash machine abroad. Caxton’s <a rel="noopener" href="/currency-cards/caxton-currency-account/" target="_blank">prepaid currency card</a> in particular offers fee-free spending abroad and also has one of the largest cash withdrawal limits in the market. <h2>Should I pay in GBP or local currency when abroad?</h2> When you pay for your purchases or withdraw travel money from an ATM when abroad, there’s another increasingly common trick to watch out for, which can end up costing you dear. This trick is commonly known as DCC. If you use your card to pay for your restaurant meal for example, the waiter will put your card in the machine and before asking you to enter your PIN, will ask if you would prefer to pay in pounds (GBP). You’ll sometimes be given this option when taking cash from an overseas ATM too. Now, although you may think it is convenient to pay in pounds because you’ll know how much will be taken from your account straight away, don’t do it – ALWAYS PAY IN THE LOCAL CURRENCY. It’s a little technical but let me explain why paying in pounds when abroad is a big NO: When you use your travel money card overseas (debit card, credit card or multicurrency card) and pay in the local currency, you will pay the standard exchange rate set by MasterCard or Visa (depending on your card issuer). However, if you agree to be charged in British Pounds (GBP) the retailer or ATM provider can use a local exchange rate rather than the official MasterCard or Visa rate and, in some cases, this can cost you an extra 5% to 7% on your bill. This little-known scam is known as Dynamic Currency Conversion (DCC), which basically makes extra profit for the retailer or cash machine provider at your expense. <h2>How to cut holiday spending costs</h2> For travellers with a Caxton <a rel="noopener" href="https://myaccount.caxtonfx.com/Account/Register?AffiliateCode=blackcard&RedemptionCode=blackcard" target="_blank" data-anchor="?AffiliateCode=blackcard&RedemptionCode=blackcard">multi-currency card</a>, MasterCard stepped in and banned the use of Dynamic Currency Conversion transactions from April 2019. This move has saved UK tourists many thousands of pounds already in unnecessary charges, so if you’re a frequent traveller overseas it may be worth upgrading your plastic to a specialist travel card, rather than relying on your normal UK debit or credit card. I hope this article will help you keep your travel money charges to a minimum, so you keep more of your spending money for those holiday treats rather than shelling out on hefty commission charges. <table border="2" cellpadding="2"> <tbody> <tr> <td width="113"> Cost of 100 Euros in cash – with 7% DCC mark-up </td> <td width="87"> </td> <td width="100"> </td> <td width="100"> </td> <td width="100"> </td> <td width="100"> </td> </tr> <tr> <td width="113"> Card </td> <td width="87"> Withdrawal </td> <td width="100"> Rate </td> <td width="100"> 7% additional DCC on rate </td> <td width="100"> ATM withdrawal fee </td> <td width="100"> TOTAL cost </td> </tr> <tr> <td width="113"> Caxton FX Prepaid card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1348 </td> <td width="100"> 0% </td> <td width="100"> Free </td> <td width="100"> £88.12 </td> </tr> <tr> <td width="113"> Halifax Clarity Credit Card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1631 </td> <td width="100"> 7.00% £6.02 </td> <td width="100"> £0.00 </td> <td width="100"> £92.00 </td> </tr> <tr> <td width="113"> Santander Zero Credit Card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1631 </td> <td width="100"> 7.00% £6.02 </td> <td width="100"> £0.00 </td> <td width="100"> £92.00 </td> </tr> <tr> <td width="113"> Tandem Bank Credit Card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1631 </td> <td width="100"> 7.00% £6.02 </td> <td width="100"> £0.00 </td> <td width="100"> £92.00 </td> </tr> <tr> <td width="113"> NatWest Debit Card (Visa) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1564 </td> <td width="100"> 7.00% £6.05 </td> <td width="100"> £2.00 (2% min £2) </td> <td width="100"> £94.53 </td> </tr> <tr> <td width="113"> TSB Debit Card (Visa) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1564 </td> <td width="100"> 7.00% £6.05 </td> <td width="100"> £2.00 (1.5% min £2) </td> <td width="100"> £94.53 </td> </tr> <tr> <td width="113"> Virgin Money Credit Card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1631 </td> <td width="100"> 7.00% £6.02 </td> <td width="100"> £4.30 (5.00%) </td> <td width="100"> £96.30 </td> </tr> <tr> <td width="113"> MBNA Credit Card (MC) </td> <td width="87"> 100 Euros </td> <td width="100"> 1.1631 </td> <td width="100"> 7.00% £6.02 </td> <td width="100"> £4.30 (5.00%) </td> <td width="100"> £96.30 </td> </tr> <tr> <td width="113"> 100 Euros from Gatwick at 0.9303 </td> <td width="87"> 100 Euros </td> <td width="100"> 0.9303 </td> <td width="100"> N/A </td> <td width="100"> N/A </td> <td width="100"> £107.49 </td> </tr> </tbody> </table> <a rel="noopener" href="/caxton-cards/" target="_blank"><img style="width: 500px; height: 125px;" src="https://mediaumbraco.blob.core.windows.net/img/1099355/caxtoncard-promo-banner-03.png?width=500&height=125" alt="" data-udi="umb://media/6df25084aa984b97abc05767425af66b" /></a>

This simple trick will save you money when spending abroad

Andrew Hagger