The best exchange rate for changing pounds sterling is always obtained by paying with a card since it is by far the most cost-effective option. And to carry some cash, the best option is to withdraw money from an ATM.
In other words, the best strategy to save as much money as possible would be to always pay with a card (as we will see later, in 2024 the Wise card offers the best exchange rates and the lowest costs in the market) and only withdraw the amount of cash that we will need from an ATM.
Certainly, this technique to save the maximum amount of money on your vacation may surprise you, as in the end, if you go to any currency exchange or bank, you will see how they advertise “no fees” and, therefore, one could simply think that the logical thing to do would be to exchange pounds at the current exchange rate and that’s it, right? Well, no! Everything has a cost, even paying with a card has a cost, although they may not tell you or you may not see it at first glance.
I’m going to tell you a secret: this website was created by a group of friends who have worked for several years in currency exchange offices, and frankly, changing cash is the worst option by far. Moreover, to give you an idea of the extent of this bad alternative, you should know that most currency exchange operators or bank employees have discounts for exchanging currencies compared to the exchange rates offered to customers. But not even with that! We never exchange cash. At most, depending on the trip, only a small amount for certain payments or if it is necessary to enter the country.
Therefore, it is clear: always pay with a card and only withdraw the pounds in cash that we will need from an ATM. Now let’s see how to minimize the cost in both cases:
Which is the best card for international payments?
Based on the study we have conducted of all the cards available in the market for this year 2024, for payments in any foreign country, travel cards have lower costs than bank cards, and among travel cards, the one that provides the lowest costs is the Wise card.
These results are valid not only in terms of costs for payments in international stores in foreign currency (Wise would offer the best conditions, other travel cards would be on average about 4 times more expensive, and bank cards on average about 10 times more expensive); but also in the costs of withdrawing cash in foreign currencies from ATMs outside your country (Wise would again offer the lowest fees, other travel cards would be on average about 4 times more expensive, and bank cards on average about 20 times more expensive).
Similarly, if you want to know exactly the cost differences and functionalities between the different cards you can find in the market in 2024, do not miss our comparative study at this link. As you will see, this comprehensive study analyzes all types of cards (debit, credit, and prepaid) and all types of providers (banks, fintech, financial institutions, etc.).
Is it necessary to take our country’s cards abroad?
As we have mentioned, it is preferable to use the Wise card instead of a conventional bank card or other travel cards since you will save a significant amount of money when paying in foreign stores and when withdrawing money from international ATMs by paying the lowest possible fees.
In this way, it would not be necessary to carry any other card initially, but keep in mind that if you are going to make payments such as renting a car, you will need a credit card since most car rental companies will hold a certain amount as a deposit and only accept credit cards.
If, on the other hand, you are not going to carry out this type of transactions, it is advisable to leave your bank cards with a higher balance at home and only for security reasons, it would be advisable to carry an extra debit card with a small balance in case of emergencies (imagine that your other card gets damaged or stolen and you also lose your phone, so you have nothing to pay with).
Keep in mind that in case of theft, you run the risk of fraudulent transactions being carried out with your cards, within the limits they have, while with the Wise card we recommend, your balance will never go negative, so only the deposited balance can be spent.
In addition, you can instantly block your Wise card from your mobile phone, while with your bank cards, you may have to call your bank to cancel them, running the risk that they may not provide service at that time due to holidays or being outside customer service hours.
For all these reasons, when traveling, it is always much better to carry a debit card like the Wise card with the amount of money you will need. If you need more, you can always reload it instantly through the mobile application, and if you want to block it due to loss or theft, you can do it instantly through the application as well. In this way, you will have full access to your money at all times, without paying commissions for it and minimizing the risk of theft.
As you can see, this card has numerous functionalities through the mobile phone, so it is important to make sure your phone battery is always fully charged. For this, remember that plugs are different in many countries. Therefore, it would be a very good idea to get a universal plug adapter for traveling, as it can be useful for any future trip you plan to take. In this link, for a very affordable price, we show you a universal plug adapter, as well as other ideal and necessary products for traveling.
Finally, it is important to know that if you are going to take your credit card from your bank to pay deposits in operations such as car rental, it is recommended to notify your bank before traveling abroad about your travel plans and the limits you will need. Keep in mind that all cards have daily, weekly, and monthly limits, and when traveling, you will spend more than usual, so if you have relatively low limits without knowing it, you could reach your limit unknowingly and find yourself in serious trouble.
What to do if my card runs out of balance abroad?
If your debit card runs out of balance abroad, you can always obtain money in a very simple way:
- If you have a bank card, you should contact a family member or friend who is a customer of the same bank to transfer money to your account. Transfers between accounts of the same bank are instant, so once the transfer is completed, your card will be able to use the new balance in your account. Another option would be to make an “immediate transfer” between accounts of different banks, as it is also processed instantly.
- If you have a prepaid card like the Wise card, you can reload it through the app (or someone else can do it for you) and receive the money instantly.
What should I do if all my cards are stolen abroad?
If all your cards are stolen abroad, here are your alternatives to get by:
- Use the pounds you have withdrawn from an ATM: You can pay with the cash in foreign currency in case you have made a withdrawal from an international ATM.
- Exchange your currency for cash: It is always recommended to carry some cash in your country’s currency in case of emergencies, as you can exchange it for pounds at currency exchange establishments if necessary.
- Pay with your mobile phone: If your phone has NFC technology and your bank offers mobile payment services, you can link your mobile phone to your card, and even if the card is canceled or blocked due to theft, you can continue to make payments with your phone without any problem.
- Have someone pay for what you need from your country: If you simply need to purchase a plane, train, or boat ticket, any contact you have in your country can pay for it online and send you the boarding pass through your phone (or you can download it through the company’s app).
- Receive money through money transfer agencies: In most tourist cities, there are many agencies of this type. In these agencies, any contact you have can make a transfer from your country so that you receive the money abroad.
- Sell your jewelry at a gold buying store: In most major cities around the world, there are numerous gold buying establishments where they will easily buy any gold jewelry from you.
- Sell your higher-value belongings at a second-hand shop: The most sought-after and easily sellable items would be technological products like mobile phones or laptops, as well as quality clothing and watches.
- Ask for money: The easiest way to get what you need would be to ask fellow countrymen who can trust you. If you need a small amount, the perfect place to ask is near vending machines since everyone receives change from them, and when asking, it’s very likely that people will give you something.
- Go to your Embassy or Consulate: As a last resort, the representatives of your country can always provide assistance.
Where to find the best cash exchange rate for pounds?
As mentioned earlier, the cheapest way to obtain cash in pounds is by withdrawing money from ATMs.
In any case, if you wanted to exchange cash for pounds at a currency exchange or bank, an exchange rate with a margin of less than 5% compared to the official exchange rate would be a good rate. A rate with a 5%-10% margin would be acceptable, a rate with a 10%-15% margin would be a bad rate, and anything beyond 15% would be usurious.
You can easily find the official exchange rate of the pound sterling against your currency on Google. By subtracting the offered rate and dividing the difference by the official rate, you will obtain the percentage margin that they are applying.
Usually, highly trafficked areas in tourist locations are the worst places to exchange currencies since they apply higher margins on the exchange rates. Therefore, it is best to search in advance on the Internet for a good exchange establishment instead of going to the first one you see.
In any case, if it were a matter of exchanging a small amount of money, it wouldn’t matter much where you exchange it in case of necessity and urgency since it would involve assuming a small extra cost in the worst-case scenario.
How much cash is enough for traveling?
Exchanging cash only serves two purposes:
- It serves as an emergency fund in case your card and phone are stolen, so you can at least manage to eat, make phone calls, travel to the embassy if you need to request a duplicate passport, and get to the airport to leave the country.
- It serves for making cash payments: in some street stores, vending machines, and to pay for certain services such as laundromats, phone booths, shopping carts that require coins, etc.
Therefore, depending on the number of days you will be traveling and how much you plan to spend in cash, you can roughly calculate what you need, which in any case should not be a large amount.
Is it possible to know if the pound exchange rate will be better or worse in the future?
Official currency exchange rates work like any other financial market, such as the stock market. Obviously, there are analysts and financial gurus who make predictions, but just like predictions about stock prices, with the available data, there is no evidence to prove that anyone can predict future prices.
Generally, foreign exchange rates tend to be quite stable, and within the course of a month, they do not fluctuate much more than 5%, unless there is an unexpected economic or political event, such as the unexpected victory of an opposition party with a groundbreaking economic program.