advantage of getting travel money from home.

Kristobelle

I used Sainsbury Supermarket using my Nectar card. I have one of the best credit cards for euros. I also used that when abroad and it is supposed to be cheaper than getting the money from home. The downside is that some machines charge you a fee of around 2 euros, you have to pay interest on the money you withdraw up to your statement date and so the advantage is extremely marginal. Obviously there are dangers in carrying around large amounts of cash but with the supermarkets you do get a range of notes and not all 50 euros. For the two of us I usually take around £800 worth of cash with me in euros on the basis that it is unlikely to get stolen (in Greece) NOT Barcelona! It is easy to get carried away when comparing rates and sometimes the added convenience is worth paying an extra £5 for.

eskbanker

You may be right but personally I wouldn't dream of taking such a large amount of cash on holiday with me anyway, given how easy it is to make most purchases by (FX-friendly) cards, in most relatively mainstream destinations!

Brie

I tend to get money out when I arrive using my fee free CC.  Obviously the ATM itself might charge but that's minimal.  To get around paying interest I set up a payment or two to the CC so that the withdrawals are paid for asap.  Sometimes this means there's a slight credit on the card but as I'm also using it for actually paying for meals etc that is often quickly corrected.  Now with free wifi I can often set up further payments during the holiday if I need more cash.

jbrassy

Firstly, I imagine most places in Greece will just accept card payments. Second, rather than taking €800 in cash with you, just withdraw what you need when you arrive. The ATM may charge you, but it will only be a small amount. Just withdraw on a debit card like Starling or First Direct if you want to avoid interest charges and the hit on your credit file.

Nebulous2

We've had repeated discussions about withdrawing money, and spending abroad with people often having a preferred method, whether it is the most cost-effective one or not. 

Chase has been a disruptive force in many ways and being able to get 1% back on most of my foreign purchases, using their debit card, instead of it costing me fees,  has been a great improvement. 

Getting notes is generally the most expensive way to do it. Look at the spread on the high street. Change £100 into euros, immediately change what you get back into pounds and you'll have around £85 from your £100.  15% of your money, that's 7.5% per transaction, has gone in charges. 

That's about £60 to change £800. 

eskbanker

Nebulous2 said:

Getting notes is generally the most expensive way to do it. Look at the spread on the high street. Change £100 into euros, immediately change what you get back into pounds and you'll have around £85 from your £100.  15% of your money, that's 7.5% per transaction, has gone in charges. 

That's about £60 to change £800. 

While I agree that buying currency is unlikely to be optimal, I don't believe that the spread is as symmetrical as you suggest - my expectation is that leading UK exchanges will typically load the underlying bank rate by a few percentage points for converting GBP to EUR, but will offer substantially poorer conversion in the other direction (it's not so easy to shop around online), so if there's a spread of 15% it'll probably be closer to 3-5% and 10-12% rather than 7.5% each way as such....

Nebulous2

eskbanker said:

Nebulous2 said:

Getting notes is generally the most expensive way to do it. Look at the spread on the high street. Change £100 into euros, immediately change what you get back into pounds and you'll have around £85 from your £100.  15% of your money, that's 7.5% per transaction, has gone in charges. 

That's about £60 to change £800. 

While I agree that buying currency is unlikely to be optimal, I don't believe that the spread is as symmetrical as you suggest - my expectation is that leading UK exchanges will typically load the underlying bank rate by a few percentage points for converting GBP to EUR, but will offer substantially poorer conversion in the other direction (it's not so easy to shop around online), so if there's a spread of 15% it'll probably be closer to 3-5% and 10-12% rather than 7.5% each way as such....

I haven't looked at it for a while, but it is extremely difficult to work out what you are being charged, as there is a lot of smoke and mirrors. The classic one is the providers who proudly announce that they don't have any fees, but they have a bigger spread, which can make them more expensive than some that do charge fees. 

It doesn't help that they typically set rates once a day and the interbank rate moves around within that. 

I had assumed the spread was centred on the interbank rate when it was set, to allow for movement, otherwise there would be room for arbitrage, rather than being biased in one direction. 

eskbanker

Nebulous2 said:
I had assumed the spread was centred on the interbank rate when it was set, to allow for movement, otherwise there would be room for arbitrage, rather than being biased in one direction. 

I'm not sure there's much scope for exploitation but there doesn't seem to be much published rate transparency for the EUR to GBP conversion, so difficult to validate.

However, M&S Bank shows a buy back rate of €1.30 whereas their sell rates are more like €1.14 (spot) or €1.16 (pre-order), and the interbank rate is about €1.18, so that limited sample does support my view! 

zagfles

Changing cash in the UK is almost always worse value than withdrawing cash from a foreign ATM with a fee free card, even if the ATM charges. Buy/sell spreads are often over 10%, whereas a card will get you the VISA/Mastercard rates which are usually within 0.5% or so off the interbank rate. Just avoid accepting DCC rates at the ATM. Besides almost everywhere (inc Greece) it's easy to pay with card these days, so you probably don't need much cash. See the travel/currency board. 

MeteredOut

zagfles said:

Changing cash in the UK is almost always worse value than withdrawing cash from a foreign ATM with a fee free card, even if the ATM charges. Buy/sell spreads are often over 10%, whereas a card will get you the VISA/Mastercard rates which are usually within 0.5% or so off the interbank rate. Just avoid accepting DCC rates at the ATM. Besides almost everywhere (inc Greece) it's easy to pay with card these days, so you probably don't need much cash. See the travel/currency board. 

I know you'll know this, but I'll add "unless you take out a small amount, where the ATM charge could be a large percentage". ie, don't just take out 20 euros at a time.

penners324

I don't use cash abroad unless I have to.

I've spent weeks in NZ & Oz and not once did I use cash.

Only places where cash was needed was in India and Sri Lanka (just used a local ATM every few days).

I've been to France, Germany, Canada, and a few others in the last few years. No cash required