Martin Lewis has issued a stark warning to anyone planning a summer 2026 holiday abroad, explaining how easy it is to fall victim to a 'sneaky fee' when paying with plastic. The personal finance guru, speaking on his BBC podcast, highlighted that most credit and debit cards add a non-sterling exchange rate fee of around 3%, meaning a £100 purchase in euros actually costs £103. He also cautioned against using airport bureaux de change, calling the rates 'horrendous' due to captive custom.
Understanding the Non-Sterling Exchange Rate Fee
Lewis explained that while card companies get a near-perfect exchange rate on the day, most apply a 3% non-sterling fee. For example, buying something worth £100 in euros results in a £103 charge. Withdrawing cash from an overseas ATM can incur extra charges and interest, even if the credit card is paid off in full. Some debit cards also add a spending fee. The cheapest option, he said, is to get a specialist overseas credit or debit card that waives this fee, so £100 worth of foreign currency costs exactly £100. The best cards also have no ATM fees and may offer cashback.
Airport Currency Exchange: A Costly Mistake
On ITV's This Morning, Lewis warned against obtaining cash at airports, ferry ports, or similar locations. 'The worst place to get your cash is at the airport or at the ferry port or anywhere like that because they have your captive custom and the rates are horrendous,' he said. Instead, he advises using travel exchange comparison sites before travelling. 'You'll just say, 'I want £600 worth of dollars. Who's going to give me the most dollars for my £600?' And that's the way that they will work. So, that's by far the simplest way to do it. Just get yourself on a comparison. But don't wait till you get to your destination.'
Always Pay in Local Currency
Lewis stressed that travellers to Europe, the US, or Vietnam should always choose to pay in the local currency, not pounds. When a machine or terminal offers the choice, selecting pounds means the merchant does the conversion, often adding 6% or 7% on the exchange rate. 'If you're in Europe and you're paying on a card, pay in euros,' he said. 'If you're in America, pay in dollars. If you're in Vietnam, pay in Vietnamese dong.' This applies even for those without a specialist card, as standard UK cards typically offer better rates than dynamic currency conversion.
Specialist Cards: The Best Way to Get Cash
For those who prefer cash, Lewis recommends using a specialist overseas card like a Chase card in an overseas ATM, which offers no fees and a near-perfect exchange rate. He also advised that regular travellers to the same destination may find a local money changer with good rates, but for most, using a comparison site and obtaining cash before departure is the safest bet.
