This simple trick will save you money when spending abroad

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... 


Should I use debit or credit cards abroad?

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 currency card is the most efficient way to spend abroad.

A credit, debit or travel money card 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 - unless you choose a fee-free travel card like Caxton.

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%! That's why so many people now choose a multi-currency card instead, as you're less likely to be hit with unexpected fees. Caxton’s prepaid travel card in particular offers fee-free spending abroad and also has one of the largest cash withdrawal limits in the market.


Should I pay in GBP or local currency when abroad?

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 dearly. 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.

The reason why paying in the local currency will let you avoid additional fees is that when you use your travel money card overseas (or a debit or credit 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 trick is known as Dynamic Currency Conversion (DCC), which basically makes extra profit for the retailer or cash machine provider at your expense.


How to cut holiday spending costs

The simplest way to avoid currency conversion fees is to use a Caxton card loaded with the local currency, giving you access to more competitive exchange rates. Using a pre-loadable travel card for your holiday also allows you to keep a better eye on your spend, as you can set your budget before you go.

We hope this article will help you keep your travel money charges to a minimum, so you can use your money on holiday treats rather than shelling out on hefty commission charges.


Cost of getting €100 with different providers*




7% additional DCC on rate

ATM withdrawal fee

TOTAL cost

Caxton Card

100 Euros





Halifax Clarity Credit Card (MC)

100 Euros


7.00% £6.02



TSB Debit Card (Visa)

100 Euros


7.00% £6.15

£2.00 (1.5% min £2)


NatWest Debit Card (Visa)

100 Euros


7.00% £6.14

£2.00 (2% min £2)


MBNA Credit Card (MC)

100 Euros


7.00% £6.16

£4.40 (5.00%)


100 Euros from Gatwick at 0.9303

100 Euros





*Information correct as of the 19th of July, 2023


Need a travel money card that can help you get the most out of your holiday? Enjoy fee-free spending abroad and get the best rates on city breaks and beach holidays with your Caxton Card. Apply for yours today, or top up your existing card.

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