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Get the best euro exchange rate on a credit card

What’s the best way to spend as you travel around Europe? Take the euros as cash or spend on a travel credit card?

The pound has fallen against the euro, so we explain how you can make more of your pounds when you’re on the continent.

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exchange rate 2015-2016

You can buy your euros from high-street bureax de change, or order them from an online currency broker, load a pre-paid card with euros to spend when you’re on the continent, or simply use your credit card.

How to get the best exchange rate for euros, things to remember:

  • Headline rates are not generally available to the public
  • Bureaux de change are typically the most expensive way to buy euros
  • Buying currency online can be cheaper
  • Visa/MasterCard exchange rates very close to headline rates, but card usage fees make them more expensive
  • Best rates to be had through no foreign transaction fee cards (but only for card purchases and watch out for interest charges)

Credit cards that will get you the most euros

You want to look for cards with no foreign/overseas transaction fees or non-sterling transaction fees. Spending on these cards can get you some of the best exchange rates for euros at the MasterCard/Visa daily exchange rate.

Typically the fee-free spending is only available for card purchases, as a separate fee will apply for withdrawing cash (as well as possible ATM fees) which makes the cash exchange rate far less competitive.

Card issuers who don’t charge foreign transaction fees are typically making a loss per transaction, as they are swallowing the costs of processing your transaction and converting your pounds into foreign currency.

This is an incentive to attract customers and encourage them to spend. The issuer usually plans to recoup the money they lose through interest charges or annual fees for the card.

These interest charges can add up to more than you can save from getting the best exchange rates, so if you want to make sure you’re not caught out, make sure to pay off your card balance before the end of each month.

Post Office credit card

This card lets you spend fee-free wherever you are in the world, so you’re effectively spending euros at the MasterCard daily exchange rate with no added costs.

However the APR means you will have to be careful to pay off your balance at the end of each month.

You can buy euros as cash from any Post Office bureaux de change without being charged cash advance fees. But if you withdraw cash abroad a  cash advance fee will apply. In both cases a higher interest rate will apply.

Nationwide Select Credit Card

With 0% interest on purchases as well as no overseas usage fees this card from Nationwide is a great choice for those who don’t think they can pay their balance off in full at the end of the month.

However, the catch is that this card is only available to customers who already have a Nationwide current account.

aqua Advance Credit Card

This card looks pricey with a high APR, but it does come under the umbrella of ‘credit builder’ cards, so it may be a good choice if your credit score is less than perfect and you want a card for overseas spending.

You can reduce your APR by not missing any of your minimum monthly repayments – but remember, either way, if you want to take advantage of the 0% overseas fees you should aim to pay off the balance in full each month.

Getting the best euro exchange rates

The exchange rate is fast moving and can change by the second. So getting the best exchange rate for your euros depends on when you buy them, but it is also affected by how you buy euros and  where you buy them from.

The rate you see in headlines and on news tickers is not the rate you will get. This rate is the interbank market rate, which is the price that big international banks will trade currencies for.

The rates for buying euros that are available to the public will be more expensive than these, sometimes by as much as 10¢ per £1, but by shopping around or picking the right credit card you can reduce this margin and get close to the interbank rate.

Visa/MasterCard credit card exchange rates

Perhaps the most convenient way to spend euros is to simply use your credit card to spend when you’re on the continent. Cards provided by MasterCard and Visa are practically universally accepted wherever you spend in Europe.

MasterCard and Visa’ set their own exchange rates for all cards they provide. These are normally very close to the interbank rate for euros, only off by about 1¢ or so, eg the Visa rate on 17 March 2015 was £1 = €1.397 when the market rate was €1.404(high)/€1.385(low).

However, your card issuer will typically be charge you fees for currency conversion and overseas usage when you spend on your card.

These fees are often around 2-3% of the value of your transaction and if withdrawing cash there will often be an additional cash fee of 2-3% added on top of that.

There are credit cards that don’t charge any fees for converting currency, so getting one of these can save you a substantial amount of money and get you near perfect market exchange rates.

Rates from a bureaux de change

Buying your travel money on the highstreet is convenient but you’re not likely to get the best rates. Typically this is the most expensive way to buy your travel money, especially if you wait until you are the airport to buy your money.

The bureaux de change market is highly competitive though, so while scouring the highstreet for the best rates might take effort,  it could pay off and give you more money to enjoy on your holidays.

Online exchange rates

This will usually get you more competitive exchange rate for your euros than buying on the highstreet, but you do need make sure you’ve planned a bit in advance as it could take a few days to process your order and securely deliver the money to your door.

Pre-paid card exchange rates

With a pre-paid currency card you can load a card with euros you have bought in advance, you can then spend or withdraw cash as you would with any debit card.

The exchange rates available for pre-paid cards vary, some will offer the same exchange rate as bureaux de change, some will sell you euros for their more competitive online rates and many use the standard Visa/MasterCard exchange rates applied to all cards.

Company Details Fee 

Fee includes bank account
No credit checks
£4.95 for the card
£9.95 per month

Bank online or with the App
No credit checks
Have wages or benefits paid in (proof required)
One off £0.99 fee for the card
ATM withdrawals cost £0.99
Paying in money as cash at a paypoint costs £0.99
Quarterly maintenance fee £0.99

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