Holiday spending

I work for the post office and in our office we always try to advise customer's to pay in cash, as it is much more straight forward and also there is then no commision charge from the customer's bank.

Exchange rates using a CaxtonFX prepaid cards seem excellent. Am I correct?

nationwide are changing their flex account cashcards so that you can no longer use them abroad. this is happening between now and september. no more free withdrawls. what is the point in having an account that you cant use when you go on holiday

I was hoping Martin Lewis would have mentioned prepayment cards as I've not had one before and have yet to find anyone I know that has one, they seem such a good idea I would have thought he would have compared them - what safeguards are there for your money once you have paid it into the account? (for example if your provider e.g. fairfx get into financial problems

Hi, I just wanted to also add that i've just come back from a week in Italy and used my Barclays debit card to withdraw cash and to pay for meals. I was charged £1.50 per transaction and also a % fee on the amount spent.

I think I will be looking at a better card for the future!

totally agree i've been finding several different ways of taking money abroad
and the best is the pre-paid, i don't want to pay a fee for use of my money abroad.
and most don't even ask for a charge is using it abroad from an ATM or in a store

Last year we took our 3 children abroad to Turkey for a 2 week holiday. I had £600 on travellers cheques and hubby took £200 in cash. The remainder of our cash was on a cash card not a debit or credit card supplied by Barclays Bank. We checked the card worked in cash points in the UK and everything seemed OK. When we arrived in Turkey we went to use the card in the hotel on arrival to pay for air conditioning and were told that the card did not work - we tried cash points at the banks and the same problem occurred. We rang Barclays on our mobile and they said they could not help us as the cards were still on trial abroad - we are premium customers (we were not informed of this of this beforehand). We spoke to our tour rep - Thomas Cook and they were brilliant. We transferred cash from the UK to their offices and they brought it to us enabling us to finish our holiday. When we returned to the UK we used the card to make withdrawals from the bank at a daily charge. We still await an apology from Barclays.

Hi ya, I work for the Post Office too, and am the Travel Product Specialist. When customers come in we always tell our customers that their Credit or Debit card provider MIGHT charge them for using their card to buy their currency. BUT, I was a bit disappointed that Martin didn't touch on the new feature on the Post Office credit card, which is if you use it in a Post Office to buy your currency, you will NOT be charged a cash advance fee AND it is classed as a purchase.

To really save at all times, use cash. Cash discourages spending, and credit or gift cards encourage it which Mr Lewis is not going to tell you. He owns a business that is paid to introduce customers to cards. What a shame that for the past five or six years Mr Lewis has not been telling people to use cash. When consumers part with their money (cash versus credit) and the form of payment (cash, cash-like scrip, gift certificate or credit card) many studies have shown how puchasing behaviour changes in you favour.

Ignore the salesman's mumbo jumbo, remember what independent academic research tells you:

"The more transparent the payment outflow, the greater the aversion to spending, or higher the 'pain of paying.'" Cash is viewed as the most transparent form of payment. Priya Raghubir, PhD, of the Stern School of Business at New York University, and Joydeep Srivastava, PhD, of the Robert H. Smith School of Business at the University of Maryland, College Park.

Hi I too work for the post office and we also tell customers that banks may charge a fee if currency is purchased on a debit/credit card. I too was disappointed the new feature of the no cash advance charge on currency purchased at a post office with a post office credit card was not mentioned or the fact that we offer 0% on purchases made overseas was not either but great to see us in his top 5 cards.

I was even more disappointed in the scumbags selling mobility products ripping of the elderly and disabled some people have no morals or shame disgusting.

Mitch says that nationwide flex accounts are changing and can not be used abroad without incurring a charge. Where do you get your information Mitch. According to Nationwide costs will only be incurred if they are used outside of europe which last time i looked was still abroad.

Re: 9. Andrew

I think your attitude towards Martin is outrageous. His advice has saved me literally £1,000s of pounds, perhaps you work for one of the companies or banks that fleece people of their money?

I actually agree with your point that using cash can reduce spending. However, following Martins advice to get that cash WILL save money.

If you look carefully and the T & C's of your cards (credit or debit) you'll find there's load fees (for prepaid cards), the foreign exchange levy (which is 2% to 3% for most card issuers), plus a percentage based levy (again 2% to 3%) if you draw cash abroad from an ATM or at the counter.

Therefore its possible to pay 6% or 7% fees to spend your own money abroad on many high street bank credit or debit cards. The bank will also make a cut on the exchange rate that they give you when they then convert the foreign currency transaction to £ sterling.

It used to be that the most cost affective way of paying for goods and services when travelling was to use your credit card. These fees have all become apparent in the last 3 years and there's a reason for that.

Obviously when you book your holiday, paying with your credit card gives you the invaluable advantage of purchase protection if your airline or holiday company fails before you travel.

But not many people know that all your purchases abroad are also covered in the same way, including hotel bookings if you’ve organised your holiday yourself and paid with your credit card.

Section 75 of the Consumer Credit Act 1974 makes your card issuer jointly liable with the company you’re buying goods or services from if something goes wrong with the transaction (for amounts between £100 and £30,000).

This means you can claim the full value of a purchase from your credit card issuer, not just the amount you paid on your credit card i.e. if you paid part of the costs or a deposit.

In the past credit card companies have challenged whether Section 75 applies to purchases made overseas. In order to clear up the confusion The UK Office of Fair Trading went to the High Court to resolve the matter. It initially lost the case, but won on appeal, in 2006. This means that foreign transactions on your credit card are covered in the same way as UK ones.

However, as with all financial products there are always companies out there offering discounts and promotions and there are a number of prepaid and post pay credit card offers out there at the moment that are offering deals on the foreign exchange fees.

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All this user's posts have been removed.Why?

@14: I wouldn't write Martins advice off based on the example you give, I think most people would have given similar advice at that time. I remember financial experts predicting massive increases in the price of oil. Besides, at other times just as many people have saved when taking his advice and capping before prices before they rose. The people you talk about may not have got the best deal in the long run, far from it, but if they followed his advice on cashback (eg [Unsuitable/Broken URL removed by Moderator]) could have pocketed up to £120 to cushion the blow.

As for American Express I don't think this will be moderated in time but here's a link that took 2 minutes to find on Martins site.

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Take an example that might be far more/less than you expect to spend. Assume you spend £1000 on purchases using the card and withdraw £200 cash in spain.

American Express Costs
Purchases: £1000 x 2.99% load = £29.90
Cash: £200 x 3% fee = £6 PLUS you pay 27.9%APR on this from the day of withdrawal until the day you pay it off (even if paid in full). This will be about £4 if you pay off 1 month after withdrawal.
Total = £40

Nationwide Debit
Purchases: No load (in Europe) = £0
Cash: No fee, No load =£0
Total = £0

OK, £40 might not break the bank but would you rather use it towards your spending money or see it go towards a bankers bonus. I know my choice.

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Customers using its debit cards at cash machines outside the United Kingdom will in future pay a commission charge of 2% plus a £1 flat fee - still better than many other banks but the "holiday" is over for free cash withdrawals in Europe and double the rate from 1% outside of Europe.

Nationwide claim that by offering free travel insurance to customers who use the FlexAccount as their main bank will benefit from the savings on travel insurance which will more than offset the costs of cash withdrawal in Europe & Beyond.