Advice please hotel bill

bagpussofsussex

Hi all,

We’ve made a hotel booking for Portugal this summer, the deal is to reserve with a card and pay when we get there, the cost is about 4,000 euros. We also have a Tesco platinum credit card, it’s not on a particular interest deal but the balance on it is very low, I generally use it to collect points and pay it mostly off

I’m pondering what the best/expected way to pay would be. Our normal debit card is a nationwide Flex account, and we do have the money available now. I’m quite conscious of brexit happening in the meantime.

a)Buy cash euros today and put in an envelope to hand to receptionist
b)Phone hotel today and see if I can pay with my debit card.
c)Pay with my debit card when we arrive in July
d)??

I’m pondering spending money too - am I best to buy euros cash now, pre brexit, and stash it away?

Any thoughts or advice greatly appreciated 😊 thank you

eDicky

https://www.moneysavingexpert.com/credit-cards/travel-credit-cards/

Duckyduck

D) hedge your bets by getting some monthly until you go. You won’t get it all at the best rate that way, but won’t get it all at the worst either.

No one here has a crystal ball to tell you which way rates will go. If negotiations go better than the market currently expects then rates will rise and if worse then they’ll fall.

Also, rather than physically getting cash a Euro account from one of the fintechs like Monese or even a prepaid card will probably give you a better rate.

londoninvestor

Duckyduck wrote: »

D) hedge your bets by getting some monthly until you go. You won’t get it all at the best rate that way, but won’t get it all at the worst either.

No one here has a crystal ball to tell you which way rates will go. If negotiations go better than the market currently expects then rates will rise and if worse then they’ll fall.

Also, rather than physically getting cash a Euro account from one of the fintechs like Monese or even a prepaid card will probably give you a better rate.

Agreed.

OP, if you don't go the route suggested here, be aware your Nationwide Flex debit card will charge you a 2.75% markup on any transaction in the foreign currency. eDicky's link is a good source of alternative cards. Or if you can get the Nationwide Select credit card (specifically the Select card), that's fee free for foreign currency purchases - but not cash withdrawals.

Takmon

bagpussofsussex wrote: »

Hi all,

We’ve made a hotel booking for Portugal this summer, the deal is to reserve with a card and pay when we get there, the cost is about 4,000 euros. We also have a Tesco platinum credit card, it’s not on a particular interest deal but the balance on it is very low, I generally use it to collect points and pay it mostly off

I’m pondering what the best/expected way to pay would be. Our normal debit card is a nationwide Flex account, and we do have the money available now. I’m quite conscious of brexit happening in the meantime.

a)Buy cash euros today and put in an envelope to hand to receptionist
b)Phone hotel today and see if I can pay with my debit card.
c)Pay with my debit card when we arrive in July
d)??

I’m pondering spending money too - am I best to buy euros cash now, pre brexit, and stash it away?

Any thoughts or advice greatly appreciated 😊 thank you

I always use one of my cards which have now fees to use abroad (Starling, Halifax Clarity etc) to pay for things while i'm there and to get cash out as if i need it.

If you you can predict the markets and currency fluctuations then your better off trading in FOREX and you will be making a lot money

londoninvestor

Takmon wrote: »

I always use one of my cards which have now fees to use abroad (Starling, Halifax Clarity etc) to pay for things while i'm there and to get cash out as if i need it.

If you you can predict the markets and currency fluctuations then your better off trading in FOREX and you will be making a lot money

So let's say person A and person B are going on the same holiday and spending the same number of euros.

A uses Halifax Clarity, Starling etc, and so the euros are acquired at the rate at the time of the holiday itself.
B buys some euros every month in the run up to the holiday, and spends those euros on holiday (for example using a Transferwise card). B's euros are acquired at more or less the average rate over the runup to the holiday.

On average, I agree A and B will pay the same number of pounds for their euros, and there's no point trying to predict the market.

However, A has a wider spread of possible outcomes, and could pay significantly more or less than the average rate. B spreads the risk over several monthly purchases so will end up closer to the average.

Most people are risk-averse in the sense that offered the choice of two bets with the same average outcome but different distributions around the average, they'll choose the narrower distribution.

So B's strategy is quite attractive, without any need for B to be some kind of market genius.

Takmon

londoninvestor wrote: »

B buys some euros every month in the run up to the holiday, and spends those euros on holiday (for example using a Transferwise card). B's euros are acquired at more or less the average rate over the runup to the holiday.

What your saying does make sense but my main problem is that if you use Transferwise for example your paying a fee to convert your money so your already loosing out to start with. Then you need to work out how much money you need and if you transfer too much then you need to pay a fee to convert it back again.

I'm not sure if there are any ways of doing this with no fees, Starling seem to offering an Euro account which might.

eDicky

londoninvestor wrote: »

So B's strategy is quite attractive, without any need for B to be some kind of market genius.

Yes, but you have to take into account the cost of conversion, which Clarity/Starling effectively don't have - only 0.5% I think in the case of TransferWise but any of the prepaid 'currency' cards or exchanging cash will cost too much to be useful.

Takmon wrote: »

I'm not sure if there are any ways of doing this with no fees

Revolut can be used to exchange at the perfect interbank rate of the moment (weekdays) and without any fee, up to £5k/month (0.5% thereafter). The funds can then be held in various popular currencies until using the card for payment (no fee) or cash withdrawal (up to £200/month fee free, 2% fee thereafter).

londoninvestor

eDicky wrote: »

Yes, but you have to take into account the cost of conversion, which Clarity/Starling effectively don't have - only 0.5% I think in the case of TransferWise but any of the prepaid 'currency' cards or exchanging cash will cost too much to be useful.

Agreed on cash and the standard prepaid cards.

I also agree Revolut is a bit better - but there's not all that much in it between Clarity / Starling vs Transferwise, at least for euros.

With Clarity/Starling you should factor in the difference between the Mastercard rate and the interbank rate. This varies day to day, but when I last looked at this, typically the MC rate seemed to be about 0.2% off the interbank.

Transferwise charges converting GBP to EUR at the interbank rate plus a 0.35% fee.

So about a 0.15% difference: £1.50 in every £1000.

Takmon wrote: »

Then you need to work out how much money you need and if you transfer too much then you need to pay a fee to convert it back again.

I'd just use any excess for the next trip - but for someone who's not envisaging going back anytime soon, you have a point.

Takmon wrote: »

I'm not sure if there are any ways of doing this with no fees, Starling seem to offering an Euro account which might.

We've been discussing this on the Budgeting & Bank Accounts board As yet, the Starling euro account doesn't let you withdraw euros directly from your euro balance, but apparently that's coming later in the year.

londoninvestor

I should add that where Transferwise and Revolut are distinctly less favourable than Clarity etc is if you're going to be spending substantially in cash rather than by card.

In that case the charge on ATM withdrawals over £200 per month will get you... I'm hoping that Starling's euro product is going to eventually do better than that.