Martin Lewis has settled the holiday money debate, advising travellers to always pay in local currency rather than pounds when using a card abroad. The money-saving expert explained that this simple choice can prevent unnecessary fees and secure a better exchange rate.
Local Currency or Pounds? The Correct Answer
During a BBC segment, Lewis addressed the common question posed by overseas cash machines and shops: "Do you want to pay in Pounds or Euros?" He stated unequivocally: "The correct answer is you should always pay in euros or whatever the local currency is." This ensures your card provider handles the exchange rate conversion, not the foreign retailer or ATM, which often applies unfavourable rates and extra charges.
Lewis stressed that this rule applies worldwide, regardless of the destination. The practice, known as dynamic currency conversion, can cost consumers significantly more if they opt to pay in their home currency.
Social Media Users Share Tips
Viewers quickly shared their own strategies. One recommended: "Just get Revolut or Monzo." Another said: "I use Starling Bank – it has no fees abroad and recommends paying in the local currency. Something I saw online about dynamic exchange rate and it can cost you more otherwise."
A third user added: "Revolut has always been the best on doing this – you can exchange right in the app, and when withdrawing it'll just take it straight from that. Half the time the only fee is the cash fee by the machine you use."
A recent holidaymaker reported: "Just back from Spain and not a single ATM did free cash withdrawals either, thankfully that's all I was charged with my Chase account." One traveller preferred preparation: "I just get Euros before I go anywhere – save all the hassle, and if I'm really stuck for cash go into an actual bank on holiday and withdraw money on my card."
Travel Insurance: Get It ASAB
Lewis also reminded travellers to secure travel insurance as soon as they book (ASAB). On This Morning, he said: "My travel insurance rule is get it ASAB (as soon as you book). People do get a little confused about this, so let's break it down."
He explained that for a single trip policy, you should buy it immediately after booking, even if the holiday is months away. "If something delays you, so you weren't back, that would still be covered because that delay is all part of the travel insurance."
