Martin Lewis reveals whether you should pay in pounds or euros while on holiday

The Sun

02-07-2025

MARTIN Lewis has issued an urgent warning to millions of holidaymakers that could save them hundreds of pounds while abroad.
The money saving guru shared the quick tip to save money while overseas in his popular MoneySavingExpert newsletter.
Holidaymakers are often given the choice to pay in pounds or euros when using their debit or credit card in Europe to buy something in a shop or withdraw money at an ATM.
But if you get the decision wrong you could end up paying up to 13% more, according to NatWest.
Martin Lewis said: 'When you go abroad and you pay on plastic and the overseas cash machine or shop asks you: Do you want to pay in pounds or euros? What do you do?
'Well, the correct answer is you should always pay in euros or whatever the local currency is.'
The consumer champion explained that by choosing to pay in euros your credit card company or bank works out the currency exchange rate for you.
But if you choose to pay in pounds then the calculations are left up to the overseas bank, shop or restaurant's bank.
This is known as dynamic currency exchange and could mean you end up paying a much worse exchange rate.
Martin Lewis added that the best situation would be if you had an overseas debit or credit card that gives you a near perfect exchange rate.
These cards are designed for spending or withdrawing cash in foreign currencies while you are travelling abroad.
The cards often come with no foreign transaction fees and competitive exchange rates.
But even if you don't have one of these cards then you will still save money by paying in euros.
Martin Lewis added: 'Even a bog standard card is beating most overseas ATMs or shop's exchange rates.
'So you want it to do the conversion which means you must always pay in the local currency.'
How do I know which card to bring on holiday?
We have rounded up the best debit, credit and overseas spending cards to help you save money while on holiday.
How to avoid roaming charges
Simrat Sharma, a mobiles expert at Uswitch, said switching to an eSIM - short for embedded SIM - can be cheaper than using international roaming.
'eSIMs make it easier to change networks," she said.
"So for example, if you're abroad you can quickly connect to the local network to pay local rates - without having to add or swap a physical local SIM card for your device.
"This means travel eSIMs are almost always cheaper than using international roaming, as users are effectively tapping into the same network plans as locals.
If you're regularly switching numbers or travelling to different locations, you'll be able to keep them all safely in digital format rather than carrying around a number of small cards.
'The software can easily be accessed via your device's app store and uploaded to your phone in a few quick steps."
Several big banks offer cards without overseas fees, so it's worth shopping around to get the best deal.
First Direct does not charge fees to pay with its debit card while overseas and there is no penalty to withdraw cash from an ATM.
Santander customers with an Edge current account do not pay any fees when using the card to make purchases or withdraw cash while abroad.
But the account has a £3 fee and you need to pay at least £500 into your account each month.
Meanwhile, Starling does not charge a fee to use its card or withdraw cash while on holiday.
There are also several credit cards that let you withdraw money from ATMs or spend in shops and restaurants fee-free.
The Barclaycard Rewards Card does not charge you transaction fees when you are abroad.
It uses Visa's exchange rate, so you will get the best value on conversions.
Meanwhile, the NatWest Credit Card does not charge a transaction fee so you can spend abroad without paying a penalty.