Spending abroad


#1

I am travelling to USA on holiday and have 2 questions:

To secure the best exchange rate when spending should I opt to have my currency and spend in £?

If I have £ and $ in my account, when I spend in the USA which will it debt from?


#2

Always opt to spend in LOCAL currency - in your example USD.

If in USA and you have sufficient funds in your USD account it will be deducted from there. If not it will come out if your GBP balance. Note that the payment will not be split across 2 accounts and that you must have sufficient funds in one of the accounts or the transaction will be declined.


#3

Thank you, does that mean it is better for me to just have all money in my account in £? When spending in local currency I am getting the best rate?


#4

Yes - you then stop the merchants bank using their own derisory exchange rate.

As for holding all cash in GBP there are a few examples of where you may consider pre exchanging to USD.

For example, there is a reduced exchange rate through Rev at weekends when the markets are closed. If you already hold USD you obviously avoid this ‘charge’.

Another case is if you feel the rate on offer at a particular time is particularly good and you wish to ‘lock in’ this perceived benefit. (Of course you may be wrong and the rate may improve still more - it’s a gamble but you at least get to fix the rate.)

Hope this helps😄