One of the main concern when planning your trip abroad, be it for a holiday or a longer trip around parts of the world, is access to money.
When budgeting for my trip I had to ask myself how much it would cost me in bank charges and other exchange rate fees, turns out it is quite a lot.
I am banking with HSBC in the UK on a standard account and here is a quick summary of the bank fees with a simulation of how much it could cost.
Payment | Withdrawals | |
---|---|---|
Fees | 2.75% Non-Sterling transaction fee | 2.75% Non-Sterling transaction fee + Cash Fee 2% (Minimum £1.75, maximum £5.00) |
£50 | £1.375 | £1.375 + £1.75 = £3.125 |
£200 | £5.5 | £5.5 + £5 = £10.5 |
It becomes quickly obvious that bank fees cost a fortune and that I would rather spend it somewhere else, especially knowing that most countries I have visited don’t accept payment as an option and cash is mainly prevalent, in some countries like Thailand there is a local bank fee, about £3 for every withdrawal at every cash machine and most of the time there is a limit of £100 or £200 per withdrawal, so if you you were to withdraw £500 in Thailand, that would cost you:
5 * ( £100 +local bank fees) * HSBC bank fees = £24.5 not too bad? well the thing is at the end, you ll have to subtract the £3 * 5 that local bank would charge you.
So actually in order to withdraw £500, you are actually withdrawing £515, then on the top of that you will have to pay £24.5 – total cost just to get your money £39.5 – that is a few nights in a hostel or a meal for 2 in some decent restaurant.
Extrapolate that on a year of travelling and that becomes a full month backpacking – no kidding!
So before I started to worry about how much my trip would cost me, I started to worry about how much accessing my money would cost me, then with a bit research I found that Halifax does this product called Clarity, it is a credit card that allows you to pay and withdraw abroad at literally no cost ( as long as you transfer the money back quickly).
So far I haven’t heard of any other similar product, neither in the UK or France but this has been good as travelling without having to worry about bank fees is definitely plus.
One extra tip: You should always travel with 2 different types of card, for the occasion where the Master Card from Halifax wouldn’t work, then I was able to use my Visa from HSBC, it comes quite handy if you lose one of them.
I wouldn’t recommend you use the Clarity card for your day to day expenses in the UK as it could cost you, but it is very convenient when I travel abroad.
I reckon I have saved as much as £1500 on bank fees throughout my trip, and that is worth about 2 months of travelling and a lot more in dreams……