Credit cards and foreign currency

_Mrs_W_ · 13 April 2018 at 5:23PM

Hi.
I'm going on holiday in a week's time and unfortunately have had to spend £300 on car repairs at the worst time ever! I had to take it out of the money we'd been saving for the holiday so we are now a little shorter on spends than we hoped to be. My husband has a credit card that he currently doesn't owe anything on, so we were thinking of using that to purchase an extra £300 in foreign currency. We knew the rates wouldn't be great but I get an annual bonus in June which would easily clear it off, so we wouldn't be paying a higher level of interest for long!
I'm now just wondering if there is a better way to do it? I know you can pay through PayPal using a credit card, so what I'm thinking is what if he sent me money through PayPal using his credit card, and I then withdrew it to my bank? I'm guessing there would be fees but surely not as high as our current options:
a) Paying for foreign currency online using the card
b) Using it to withdraw cash to buy the foreign currency with?
There are no offers on money transfers with his credit card currently, I've already checked.
Any advice would be greatly appreciated!
Thanks

Candyapple · 13 April 2018 at 5:52PM

Have a look here to see how much the fees would be if you used his card:
https://www.moneysavingexpert.com/credit-cards/travel-credit-cards#checker

If you use Paypal, it's 3.4% plus 20p, so if you did £300, it would cost £10.40.
https://www.paypal.com/uk/webapps/mpp/paypal-fees

eskbanker · 13 April 2018 at 5:53PM

Probably too late now but wasn't it possible to pay for the car repairs by credit card?

Alternatively, you might find that purchasing more with the card directly (rather than using cash) when abroad or withdrawing cash directly from the card at an ATM at your destination works out better, but you'd need to look closely at the various fees it charges.

Emily_Joy · 13 April 2018 at 6:00PM

It worth checking which credit card it is. Usually buying currency on credit card counts as a cash advance, however, my Marks & Spencer credit card allows me to pay for currency ordered from M&S and this counts as a purchase, which is great deal, as it is 3 years 0% on purchases, too.

_Mrs_W_ · 13 April 2018 at 6:05PM

Thanks for the replies. Yes it would have been possible to use the credit card but I just didn't think at the time. We've had the card for 2 years, we got it for a 0% balance transfer then after we paid that off we said we wouldn't use the card again because the interest rate went up to about 21%. We kept it just in case of emergencies, but then because we've never had to use it I forgot it even existed!
It would be cheaper to use the card for spending over there than withdrawing cash, but we won't be making any major purchases so we'd just have to use it to pay for meals etc here and there. I don't like to even turn my phone on when I'm away if I can help it, and I'd want to be able to keep track of what we'd spent on it etc so for that reason I'd rather just take cash.
I understand the fees from PayPal, but if I did it this way what would this be classed as on the credit card for interest rate purposes? Would it just be the normal rate for purchases or would it be classed as a cash withdrawal? If it's classed as a cash withdrawal then it's pointless and I might as well just withdraw the cash!
Thanks again for your help

_Mrs_W_ · 13 April 2018 at 6:08PM

Thanks Emily Joy, that M&S card sounds great. It's a Halifax credit card (not the one that's recommended for travel though!) so it would be classed as a cash advance to buy foreign currency on it

PeacefulWaters · 13 April 2018 at 6:21PM

What are the fees for a cash advance?

2.95%? Any minimum fee?

Putting the card in an ATM overseas will almost certainly get you a better exchange rate than buying currency in the UK.

_Mrs_W_ · 13 April 2018 at 6:26PM

Hi. The minimum fee is £3 and we'd have to do it in 2 transactions as it's over the £250 a day withdrawal limit, so total would be £6 in fees, plus the extra interest

Emily_Joy · 13 April 2018 at 6:30PM

_Mrs_W_ wrote: »

Thanks Emily Joy, that M&S card sounds great. It's a Halifax credit card (not the one that's recommended for travel though!) so it would be classed as a cash advance to buy foreign currency on it

If you are going on holiday in a weeks time, there still time to get a specialized travel card by then? Perhaps you can check via MSE Credit Club if you/your husband are eligible for one?

John-K_3 · 13 April 2018 at 6:38PM

If money is spthat tight is going on holiday a great idea? It sounds like you are planning to spend money that you don!!!8217;t have.

_Mrs_W_ · 13 April 2018 at 6:55PM

Money isn't that tight. We've managed to save a good deal of money for the holiday with no issues, as we do for our 2 holidays each year every year. As I said above, we don't have any credit card debt and don't generally use them, or any form of credit. However, we had an unexpected outgoing of £300 ten days before a holiday. Yes, we could just take £300 less and still have a lovely time. But when on holiday I don't like having to count pennies. As I get an annual bonus of £1000 in June which we don't have any plans for, I thought I'd rather use £300 off the credit card and pay it back in June, which I can more than easily do and it will cost me what, about £10-15 in total? I'm hardly bankrupting myself over a holiday!

Credit cards and foreign currency

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