Plastic Problems: Not much interest…or so you think

Mo' money mo' problemz

Mo’ money mo’ problemz

Who carries cash anymore? The pesky pickpockets of Phnom Penh will certainly be hoping it’s you. You know everyone is talking about plastic. Travel Heavy has a few easy to understand and vital tips on how to best spend and protect your well/ill earned money when exploring the far-reaching and often swift-handed corners of planet Earth. Have a read and make some well-informed, dollar saving decisions.

DEBIT CARDS

Debit cards are essential to almost any walk of life. They’re one of your most liquid assets, giving you instant access to your funds globally with minimal effort. And they’re certainly safer than sauntering around with a couple of hundred poking out your back pocket. But unlike the UK, your debit card usage abroad doesn’t come without consequences. Convenient as it is to produce your plastic for that Big Gulp at the 7eleven, the cost doesn’t stop at retail value.

Similar to credit cards, any transaction on your debit card is converted from local currency to sterling using the specific exchange rate of the day. On top of this commission, your bank will charge a ‘load’ fee of up to 3% of the transaction. And if that’s not enough you’re likely to be hit with a £1.50 non-sterling transaction fee. I know, I know. What’s 3% when it comes to town? Plus back home, you drop £1.50 like you’re making the money. Of course, at first glance these charges do seem negligible but consider the maths.

For every £100.00 withdrawn you could see £4.50 being picked from your pocket. Tot that up over long periods spent abroad with regular withdrawals, you begin to see that the boys at the bank really are old pros in the profiteering racket.

But don’t you fret, it’s not all doom and gloom. Really it’s all about how long you’re going abroad. If it’s a matter of weeks to a couple of months, then perhaps the cons don’t outweigh the ease and accessibility that using your debit card offers, particularly if you’re withdrawing large amounts of money on fewer occasions. And just like a credit card, you’re protected against all fraudulent activity should the card be stolen.

So, should you wake up sock-mouthed and soulless from the night before to find that you’ve been taken advantage of, financially-speaking, stay calm. All you need do is call your bank and inform them that those dodgy debits to that back-alley brothel (we assume everywhere takes card these days, but we wouldn’t stake our lives on it) really weren’t you, you promise.

Travel Heavy Plastic Pick – Nationwide Flexaccount

There are better accounts out there, but the banks and building societies that provide them are by no means nationally accessible. It’s true that Nationwide’s halcyon days of commission free debit card usage are long gone but in relation to most high-street providers, they’re still the very best of a bad bunch. Load fees are kept at 2% whilst non-sterling fees on cash withdrawals are £1. Fee-paying FlexPlus account holders won’t incur any of these charges.

CREDIT CARDS

We’re expecting gasps of horror and murmured suggestions that we’re simpletons with this selection. But please, before you decry us as moronic money meddlers and call in the blokes with a straitjacket hear us out. We assure you, we are not crazy. We are not crazy damn it.

Now, credit cards really are a minefield when it comes to usage abroad. Most cards that are personally profitable domestically can be positively nightmarish if you need to purchase on foreign soil. Any purchases are usually ladened with a 3% charge and you’re most likely going to be instantly punished with interest charges. And woe betide those who do not pay the balance off in full at the end of the month, you’ll be a whole world of pain. As in the UK, most credit cards will also deliver horrific charges for ATM withdrawals. But rest assured, if you play you’re cards right (*laughter please*) this piece of plastic can be the cheapest way to splash your cash on the move.

There are a number of specialist credit cards that support your spending outside the UK. These cards ensure there are no load fees for purchases made abroad and ATM withdrawals incur considerably smaller fees. Interest will apply immediately on these withdrawals but if you’re clever and pay this off in full quickly, the charges are hardly worth working up a sweat. Moreover, you’re legally protected on purchases over £100.00 in the case of mis-sold goods under section 75 of the Consumer Credit Act 1974. So if you rock into town expecting a double bed and an ocean view only to find yourself lumbered with a suspiciously sodden single bed and crusty pillows, sleep easy in the knowledge you can claim it back.

Plastic swaggin'

Plastic swaggin’

Travel Heavy Plastic Pick – Halifax Clarity

We could try our best to succinctly sum up the various advantages this card could bless your life with, but we feel Halifax do it far better.

Basically, no charges on purchases and withdrawals. Piss-low interest at 12.9-21.9 % (depending on the cut of your jib…though we imagine it’s simply fabulous jib you have) and pretty graphics.

http://www.halifax.co.uk/creditcards/clarity-card/

PRE-PAID PLASTIC

So you’re still sitting there scratching your head over your currency conundrum. You don’t really want a credit card, or perhaps a few years of carefree abandon have seen you be a tad laissez-faire with that whole credit score thing, whilst the idea of all those dirty debit card charges make you baulk. And then your grandfather leans in smelling of gin and rotten spam and says, “I’ll tell you this one for free. The only way to keep your money safe is travellers cheques. That’s how we always did it, never had a problem.” Travellers cheques you say? Who the fuck uses travellers cheques these days? No one, that’s who – so tell your Granddaddy to shove it and get out of that miserable Anderson shelter, or whatever hovel he’s been hiding in since 1945, and take a good look at the 21st century landscape because he’s about to get schooled.

The modern man’s travellers cheque comes in the form of pre-paid cards. Pre-paid cards allow you to withdraw and spend your money electronically with the same ease as your debit card, but differ in the sense that you load the card with cash in advance and when it’s gone you’ll need to ply it with pennies again. So for chronic over-spenders there’s no overdraft or emergency buffer for when you’ve pillaged the piggy bank.

Pre-paid plastic is particularly advantageous to exchange rates. Rather than Visa or Mastercard dictating the rate, your provider does and it’s invariably lower. Moreover, your rate is static. That means the rate that applies on the day you loaded the card is the rate you’ll pay henceforth. Whilst this can swing either for or against you in the long run, at least you know where you stand.

Sound good? Well, not to piss on your parade but these cards are cunningly crafted and there a host of charges that you need to consider before placing your eggs in this particular basket. Fees are applied to cash withdrawals, though usually at a lower rate than debit cards. Additionally, you’re likely to be hit with hefty charges for additional top-ups or replacement cards should yours be lost or stolen, which can leave a bitter taste in the mouth. These cards can also be very restrictive about the type of currency that can be loaded onto them. So should you be packing those electronic dollar bills, but you need to be ballin’ with Thai baht you’re going to see a transaction fee added on top, the percentile varying amongst providers. With this in mind it’s vital you shop around to make sure you’re getting the best deal for your needs.

Travel Heavy Plastic Pick – Caxton FX Global Traveller

Usable at pretty much all ATM’s worldwide. Not quite as cheap as the credit card but a great advantage being that they provide you with a back-up card should you, inevitably, have your card stolen by angry Cambodian beach prostitutes/lose it.

https://www.caxtonfx.com/currency-cards/currency-cards-for-you

A couple of useful sites to supplement this extensive, yet thoroughly entertaining article, are:

http://www.moneysavingexpert.com/travel/cheap-travel-money

http://www.which.co.uk/home-and-garden/leisure/guides/travel-money/

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