Cash vs Card

The thing about using a lot of cash to avoid credit-card fees is that it is increasingly difficult to find ATMs that don't charge fees. I am not expert on such matters, but all the advice I've seen for the US (Canada might be different) is to use credit cards rather than debit cards for purchases, because there are more consumer protections with credit cards.

Hi Judy. fyi - there are many credit cards available with no annual fee and also no foreign exchange fee. United Airlines / Chase is one, there are many others. Have a great trip!

What card do you have, and does it really have a fee? Also, what exactly are the fees? That is where it starts.

To be honest, even cards with a Foreign Transaction Fee are around a 3% of transaction cost, so while not ideal, it is not onerous.

There are though good cards, with no Foreign Transaction Fees, and no annual fee, Capital One has a couple (The Savoe and the VentureOne cards) and Bank of America has a travel rewards card.

Look at sites like Nerdwallet for details.

Edit: For the sake of correct terminology, what you are concerned about are cards with no Foreign Transaction Fee or FTF. This is where your card charges you what is usually a percent of the transaction amount when you buy something. Like I said, this is usually about 3%, but it could be higher or lower, in a rare case, it could be flat amount.

Do not be concerned with fees around Currency Conversion or Foreign Exchange, these are handled by the card processors clearing house, and amount to about 1% for all of us in the US.

There really should be no other fees to be concerned regarding a card, other than the Annual Fee.

You say you don’t want another credit card but a credit card with no foreign transaction fee (FTF) is really the best way to avoid the extra fees now. There are a number of credit cards with no annual fees that don’t charge an FTF. You can get such a card and use it exclusively for travel.

On my last three trips to the UK, I have only needed cash at a coin-operated laundromat and to buy a bottle of water at a kiosk.

Using your debit (bank or ATM) card for purchases puts your account at risk. Use it only for ATM cash withdrawals, and use a credit card for purchases. Many ATMs will charge a fee for withdrawals by cards other than their own, although the fee wont be large. Your own bank may also have a flat charge per transaction when used internationally. The credit card company gives you that days current currency conversion rate. Any transaction fee will likely be 3% or less. Ask your CC company how much it is. But dont be scared away by this. Spend £100 and the transaction fee is only around £3.

And do you really want to be walking around with hundreds of £s in cash? I don't even do that at home. On our 3 week trip to the UK we got £100 cash on arrival. And had to use most of it up by paying cash for dinner on our last night. The amount we were charged in transaction fees was a wee tiny fraction of the cost of that trip.

Using your debit (bank or ATM) card for purchases puts your account at risk.

How exactly?

Using your debit (bank or ATM) card for purchases puts your account at risk.
How exactly?

https://www.nerdwallet.com/article/credit-cards/credit-card-vs-debit-card-safer-online-purchases

"If you typically use a debit card for online purchases, you may want to reconsider. If your card information is hacked and purchases are made without your permission, you'll quickly find out that debit and credit cards are treated quite differently.
The key difference: With a credit card, the card issuer must fight to get its money back. With a debit card, you must fight to get your money back.”

https://www.experian.com/blogs/ask-experian/are-credit-cards-safer-than-debit-cards/

"Credit cards are safer than debit cards because under federal law, they provide greater liability protection if you're a victim of fraud.

Here's how: If your credit card is lost or stolen and someone uses it to make unauthorized charges, you'll only be responsible for up to $50. If unauthorized charges are made with a debit card, you could potentially be liable for the full amount, depending on when you report the card's loss or theft."

If the card reader has been skimmed, then your account can be emptied before you know it. You might eventually get your money back, but it will take quite some time. Credit cards have more fraud protection, especially if you have 2 step verification.

Using your debit (bank or ATM) card for purchases puts your account at risk.

How exactly?

When you use (or someone else uses) your debit card, the money comes out of your account instanty. If the charge is fraudulent, you have to now try to get it back. With a credit card, the money comes from your credit card company and they now have to get you to pay it. Huge difference.

I’ll risk it.

"Credit cards have more fraud protection, especially if you have 2 step verification."

Debit cards have two factor authentication as well. At least mine do.

While I seen the argument in terms of fraud protection, the UK is not high risk for card skimming. If you use a debit card at home, why not use it in the UK?

Judy--I can give you the three credit cards I have that have no annual fee, no foreign transaction fee, various cash back deals from 1 to 5% on all purchases, and as long as you don't mistakenly ask to be charged in USD the exchange happens at the current exchange rate (making them less expensive than cash withdrawals). These are products from Capital One, Amazon's Chase Visa card, and a Visa from Comenity via my AAA membership (I don't know if Comenity has other products that don't require being AAA). In addition they all can be tapped so there is no skimming exposure.

The Debit/Credit card risk difference is more a US thing. People in most of the world do not have those issues and use Debit cards almost exclusively.

Simon, most Americans probably don't use their debit cards at home except at ATMs, or perhaps at a supermarket to get some cash back if that's more convenient than going to an ATM.

With plenty of credit cards providing rebates, frequent flier miles or hotel points, why would we not prefer to use a credit card if we're paying the balance off each month? For decades we have been told about the superior fraud protection offered by credit cards.

Actually I normally use a credit card for the same reason, but it's pretty common here to pay for things with a debit card. I guess my main point is that the UK is not high risk for skimming and card fraud in general.

"The Debit/Credit card risk difference is more a US thing. People in most of the world do not have those issues and use Debit cards almost exclusively."

This is absolutely correct, I do not have a credit card and that is the norm here.

Yes, I looked this up recently - can’t remember the figures, but certainly it was a majority of us British people who generally use our debit cards for tap & pay rather than credit cards. I only use my credit card for purchases that I want the extra insurance on, or if it’s the end of month and my bank account is looking a little fragile.

There are approximately twice as many transactions made on debit cards in the UK compared with credit cards. This also roughly reflects the ratio of cards held overall. However, just under two-thirds of the adult population has at least one credit card.

This issue with a debit card in the US is that it is attached to a checking account and draws money from that account, which is "real money" and the equivalent of losing cash. If my debit card is in any way compromised, I lose actual money, and have to deal with my credit union to try and get that back. Meanwhile, my monthly purchase that are automatically drawn from checking account (i.e., gas, electricity, credit card, cable and phone, etc.) will not be paid. If a credit card is compromised, then you aren't losing real money, but rather "credit money" which the credit card company will forgive since it is considered fraudulently taken and will not penalize me for it (at least that was the case with me).
Now back to judylcouture's question. Get a Capital One card, which has no annual fee and no transactions fees, and put everything on there. While in London (a few times and admittingly not recently), I took out a little money (100) with my debit card at an ATM machine, and used a credit card for all else with no issues. Still had cash leftover. And, with all the points earned from using the credit card, I am almost always able to cover the travel purchase of a few nights of hotel and/or plane tickets. I use my credit card exclusively when in the US as well to avoid theft and to earn points (and of course pay it off in full every month).

...or if it’s the end of month and my bank account is looking a little fragile.

Yes - so fine for recurring everyday expenses. But traveling involves an abnormally high amount of spending over a short time. So do you want to worry whether you've loaded enough cash in your account to begin with before the trip starts? This is like paying for your trip up front, as opposed to the 24 - 30 day "float" you get with a credit card. Use a couple of no-transaction-fee credit cards with offset closing dates on a long trip and you can extend the float even more.

As others have said, Capital One offers cards without annual or foreign transaction fees - another one is the AARP travel card from Barclays.

So do you want to worry whether you've loaded enough cash in your account to begin with before the trip starts?

You’re quoting me, I think. Please note I was purely adding my experience with debit cards as an example of how most British people use tap & pay, hopefully to show visitors that skimming or cloning cards is not a huge concern here. It had been suggested earlier in the thread not to use a debit card due to these risks.

I wasn’t trying to make a recommendation about what sort of card any visitors might choose to use in order to manage their finances, as that’s a whole different question.

Another British person who doesn't have a credit card here. I haven't had one since my early 20's, or particularly felt the need for one.

A debit card is fine for me. I've either got the money to buy something or I haven't. I'd probably rate as a terrible consumer though, especially in the last few years since health has given me a more sedentary lifestyle.

It's an interesting cultural discussion though. Credit seems much more normalised with the North American contributors. I don't really see the point of spending someone else's money only to pay it back to them at the end of the month. Earning points and what have you seems like marketing fluff to me, designed to make people spend more and keep the hamster wheel of capitalism spinning. Everyone here claims to pay their card balance in full every month, but it's probably the case that many other people don't, and earn vast sums in interest for the credit providers. |s credit marketed much more aggressively in the US?

I'm probably a bit of an outlier as a middle aged adult in that I don't have any debt whatsoever. It's years since my last loan for home improvements and I've always bought cars cash, though I don't own one at all now. I haven't had a mortgage in ten years since I sold my flat in Scotland (being a landlord 400 miles away was more hassle than it was worth).

There's no valid concerns for fraud here. Card skimming is pretty much unheard of these days as far as I know. My only instance of fraud occurred nearly 25 years ago when my card was skimmed buying petrol [gas] in Edinburgh and someone in Tyneside bought their wedding dress on my account. I don't remember any particular hassle recovering the money. That was back in the days of magnetic strip cards, not modern chip and pin.

Anyway, in response to the OP's question, I think you'd be fine using a debit card for everything in the UK if you don't want another credit card. Visa and Mastercard are the biggest providers here and there should be no problem having a transaction accepted if your card has one of their logos.

"So do you want to worry whether you've loaded enough cash in your account to begin with before the trip starts?'

Wouldn't you just have the money in your account? No need to "load" anything.

I get the whole credit card points argument, and that's why I use credit card myself, but I would only spend money I actually have.

I have to admit I was curious what other people do. I'm an Australian, and statistics shows 45% of consumer payments in Australia were by debit card, and 19% by credit card.

Everyone here claims to pay their card balance in full every month, but it's probably the case that many other people don't, and earn vast sums in interest for the credit providers. |s credit marketed much more aggressively in the US?

Gerry, I do think that most people here on this forum pay their card balance every month, but you’re right that there are many people out there who don’t. And that is where the problem lies. It’s very easy to get sucked into using your credit card on all bills when you don’t have enough money to pay for it.

The credit card companies know this and credit is marketed very aggressively here in the United States. They offer points and rewards and all kinds of incentives to get people to sign up for another credit card. I had a client in a divorce one time who had bought a $1500 MacBook. He charged it and only paid the minimum payment each month By the time he came to me, he owed around $2800 on it and that was after the minimum payments had been made for a year and a half.

I tend to use a credit card mainly for convenience and I always pay everything off each month. The points are handy as but I could easily do without them. I admit that partly it’s for security as well. The fact is that there are card scammers and other fraud tactics used to get money out of checking accounts. So using a debit card over here can be a bit riskier.

Regarding skimming, I haven't swiped my credit card in ages, tap and go for credit cards is the norm now and I have no worries about skimming, etc. to inform my behavior. Also, I treat my credit card as a debit card and do not spend money I do not have, and I also carry no debt in general besides my mortgage. For a traveler from the US, using a credit card is a smart choice.

Wouldn't you just have the money in your account? No need to "load" anything.

It's one thing to have the money, but the question may arise as to which account. You can usually get a better interest rate on excess cash in places other than a checking account - money market, T-Notes or Bills, other bonds, etc. If you can use someone else's money for 20 - 50 days before you pay the bill, and earn better interest for the term, why not? In addition, unless you've received a cash discount, you're already paying for the privilege, since the merchant has built their credit card processing fees into their prices.

But not everyone has the ready cash to just take off for Europe or Australia or the States when they feel like it. There are frequently people asking for advice on the forum who are obviously pinching their pennies, trying to maximize the value of every component of their trip. For some it is a "trip of a lifetime" because they've had to save for years to be able to afford it.

Let me note that British people interjecting their opinions regarding use of cash, debit cards and credit cards just confuses the issue for US travelers. Our credit and banking protection laws are different from yours. Use of debit cards for Americans has the potential of exposing our entire bank account balance to fraudsters.

Costco members get fee-free Visa cards that carry no foreign transaction fees (FTFs). Many other credit cards similarly offer freedom from FTFs without an annual fee. In my opinion, no one who travels overseas should be without one, or preferably two.

I always bring some pounds, and have never had an issue off-loading them--last in England in August '24. I like to visit markets--Portobello, Old Spitalfields, etc--and find that while many vendors take cards, some do not; plus, if you're going to bargain I feel it's rude to then pull out a credit card. By the penultimate day I have usually spent it down and then plan to get rid of the rest, usually on souvenirs or food, leaving perhaps 20 for my next visit. I have 2 credit cards with no foreign fees and they get a good workout, too--but I always want a bit of cash with me.

When we were in Italy a few years ago, our friends were unable to use their debit card because their card had been compromised and their account was frozen until they could be issued a new card…impossible until they got home. That also meant no ATM withdrawals were possible. They borrowed cash from us and used their credit cards for the remainder of the trip, but it’s something to think about!

their account was frozen until they could be issued a new
card…impossible until they got home.

If you use ApplePay (or the Google equivalent), your card issuer can update your card electronically so you can use your new card immediately from your phone.

...their card had been compromised and their account was frozen until they could be issued a new card…impossible until they got home.

So another reason that RS suggests bringing several hundred USD - you just never know when disaster may strike, and it usually isn't that hard to find a change desk.

So another reason that RS suggests bringing several hundred USD - you just never know when disaster may strike, and it usually isn't that hard to find a change desk.

I had no idea Mr. Steves suggested such a thing. I'd love to have a chat with him about the idea sometime.

I had no idea Mr. Steves suggested such a thing. I'd love to have a chat with him about the idea sometime.

It's right here on the website: https://www.ricksteves.com/travel-tips/money/travel-checklist-money

Stash of US cash: I carry $100–200 in US dollars as a cash backup, which comes in handy in an emergency (for example, if your debit card gets eaten by the machine). I've been on the Ring Road in Iceland when the internet went down; the cashier happily accepted my $20 bill in exchange for lunch. Hard cash is hard cash. People always know roughly what a dollar is worth.

What NOT to bring: Foreign currency (unless you have some left from a previous visit) or prepaid cash cards

"People always know roughly what a dollar is worth."

I think Rick's idea that people in other countries will happily accept USD (even in an emergency) is dated and presumptive. Here in Singapore, for example, there's no way they'll accept it unless you're at a duty free store in the airport. Having cash on hand can be helpful, though, and I suppose you can always change it.

And nowadays, who knows what a US dollar is worth?

I agree with Simon, I can't imagine someone accepting USD in the UK!

I watched an "Americans driving in the UK" video on Youtube the other day as I'm wont to do sometimes and the USD issue came up. They seemingly tried to change dollars at a Tesco in Ellesmere, Shropshire and seemed surprised that it couldn't be done. I can only imagine the confused look on the Tesco cashier's face when asked to do such a thing.

I'll link to the video if you want to see some moderately horrific driving. It had me reaching for my imaginary brake pedal quite a few times and the poor, slightly aged Honda Jazz [Fit] had the life revved out of it because they seemed to be confused as to how many gears it had.

https://youtu.be/x2PDZFGtUdU?si=B9eF_if7cFDFmEvm