Using plastic overseas? Always PAY IN EUROS (even if it says 0% commission)

When 0% commission is NOT 0% commission

After my producer's enthusiasm I decided to investigate and and do some calculations. I took a picture of the screen:

While it sounded good, the rate didn't look special. Yet then I noticed the key phrase:

So this isn't the super-duper Visa/Mastercard wholesale rate, it's the bank's own wholesale rate, and frankly, that's a pile of pants. It's made its profit in the underlying rate, so no wonder it can then say it's 0% commission.

On that day it was charging £91.50 for 100 euros. But if you'd actually got it at the perfect rate on the day, it would've been £86.50 – a huge difference, even on a relatively small withdrawal.

So I went to the nearest cash machine I could to see how consistent this was.

This one, Banco Sabadell, is again using its wholesale rate – then adding 2.5% commission on top. Yet even with that, it's still cheaper at just £89.15 for 100 euros.

Then, purely for research's sake, obviously, I went to a restaurant I knew offered the option to pay in pounds or euros…

This one was based on the "Visa wholesale rate" but with 3% commission. Yet its overall rate was therefore identical to Banco Sabadell, with its 2.5% commission on its own rate.

The best way to pay or withdraw cash abroad

So, to wrap it all up, I did a few more comparisons on the day, just to prove exactly how it works. Here's my table:

Therefore the rule is simple

If you have, or get, a specialist overseas card, then there is no doubt that using it and paying in euros is always correct (though do ensure you repay in full to minimise the interest).

Yet even without one of these, if you're using your plastic abroad, while the chart shows with one bank there's a very minor gain for paying in pounds – it's negligible. Whereas get it wrong, and you can lose out a lot. So for safety and simplicity's sake, the golden rule is: