Best exchange rates – cash or cards?

The best exchange rates are not always the most straight forward to acquire.

Going back some years, the Nationwide Building Society offered a fee free debit card that. Unlike many in the market place at that time, the card was free from fees when used overseas. This “perk” is now only available on certain Nationwide current accounts. As a result, I have made use of other cards to minimise costs and make our pounds go a little bit further.

I have made use of the cards  below, and will probably make continued use of them. However, there are others on the market. Consider browsing the comparison websites when making your choices. You may also wish to establish if the card provider will carry out a credit search etc.

This article is for your information, it is not financial advice.

Here is our comparison to find the best exchange rates available.

Caxton pre paid Euro card.

Best exchange rates card or cash

The Caxton prepaid Euro card operates by purchasing currency at a pre-determined rate and then “holding” the currency with Caxton until required. There are various methods of topping up the card, including online and by ‘phone.  At the time of writing this article, Monday 24th September, the exchange rate quoted on the Caxton website is 1.224. Therefore, two hundred pounds sterling would purchase 244.80 euro. Once the card has been loaded, the card may be used in foreign cash machines to withdraw cash. The card may also be used within shops/restaurants etc to pay for purchases.

We have used a Caxton card many times over the years and whilst widely accepted. On more than one occasion, the card was refused at automated toll booths. Another drawback was when making use of automated fuel points. The service station appears to pre-authorise the transaction for up to 100 (or more) Euro. If you only spend twenty euro at the pump, the outstanding authorisation may prevent you from accessing your funds for a few days.

The Caxton Euro card is exactly what it says – a Euro card. However, if you are travelling outside the Eurozone, you may wish to search the market place for other pre paid cards.

Halifax Clarity credit card.

Best exchange rates cards or cash

The Halifax Clarity Card is a fee free credit card.

The Halifax Clarity card offers a fee free transaction for making purchases and also for withdrawing cash. There are no fees for the cash withdrawal, BUT, interest is charged from the date of the transaction until the date the debt is repaid. I have used a Halifax Clarity card to pay for many purchases, campsite fees and even the occasional toll. The most recent transaction of today’s date has gone through at a rate of 1.255, this being just over three cents to the pound more than the Caxton conversion. Based on this rate, two hundred pounds sterling would purchase 251 euro. Whilst this is only six euro more than with the Caxton, there is a bit more to the equation, namely

  • As the Clarity is a credit card, you may benefit from several weeks worth of interest free credit (purchases). However, is charged on cash withdrawals from the date of the transaction
  • Purchases over £100 equivalent may come with some protection under the consumer credit act

Norwich and Peterborough fee free debit card

Best exchange rates cards or cash

The N&P offers some of the best exchange rates when it’s fee free debit card is used.

The N&P debit card is linked to the building society’s current account. The card may be used for fee free withdrawals overseas and also for making purchases. The N&P does not show the exchange rate of euro to pounds on your statement, but shows the transaction as pounds to the euro! In order to obtain the “other” exchange rate, divide the euro amount by the sterling equivalent. In this example we can see that this transaction was processed at 1.2535. It is worth mentioning that the N&P clearly state on your bank statement “N&P  DO NOT CHARGE A FOREIGN HANDLING FEE”


In summary – pre pay or “on the day?”

The Caxton card does however offer users the chance to purchase currency when the rates are good – you do not need to be overseas to make use of the topping up facility, whilst with the N&P card and Halifax card offer “rates on the day of the transaction” when used overseas, so if you are in the UK and the rate shot up to 1.50 euro to the pound (we can wish) you would be unable to take advantage of the rate. You could of course purchase euro as cash at a foreign exchange bureau in the UK, but then have the risk of carrying cash overseas, the possibility of loss, theft etc.

Maybe carrying all three cards is the way to go? I have looked at exchange rates carefully in the past months and using the BBC business pages as a guideline, then the Caxton card seems to be two or three cents to the pound worse than the rate quoted on the BBC web pages. Note however that the BBC business pages show a commercial rate, not a rate for a cash transaction. When using the N&P or the Clarity card, the rates used almost mirror the exchange rates shown on the BBC web pages.

Best exchange rates – repeat experiment

In our quest to find the best exchange rates, this experiment was repeated again on 9th May 2014. Read here for full details.


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