Speaking on his Martin Lewis Money Show Live broadcast on ITV this evening, Martin explained how he has tested this theory “many times” to check which way is cheapest
Martin Lewis has explained why you should never pay in pounds when making purchases abroad.
The MoneySavingExpert.com founder said you should always pay in the local foreign currency instead, due to poor conversion rates when paying in Sterling. Speaking on his Martin Lewis Money Show broadcast on ITV this evening, Martin explained how he has tested this theory “many times” to check which way is cheapest.
He said: “When you are paying in plastic overseas, you always pay in the foreign currency – you do not pay in pounds. Here’s why: if you pay in pounds, it’s the overseas ATM or shop that does the conversion and every time I’ve tested this – and I’ve done this many times – it’s a pants exchange rate.
“If you pay [in the foreign currency] it is your card that does the conversion. If you’re on a specialist card, you get a near-perfect exchange rate. If you’re not a specialist card, it’s going to cost you 3% but that’s still usually better than the overseas machine.”
Martin also explained how to get the most out of your holiday money if you’re looking to take cash abroad. He first suggested comparing rates online, to see where you can get the best deals. He then warned against exchanging your money at the airport, as this always offers “the worst” rates – however, if you do need to do this, he recommended calling and booking your transaction ahead of time.
He said: “If you just want cash for travelling abroad… go on to a comparison tool and get yourself the best rates. So for $1,000, you’re going to be paying less than £800 for the best rates, £810 or more on the high street. Do it at the airport and it could cost you up to £950. If you’ve left it so late that you have to do it at the airport, call them up and prebook your money – you’ll get a better rate.”
