Martin Lewis has shared crucial advice which could save holidaymakers a fair bit of money when they use a cash machine abroad.
In an hour-long special edition of the Martin Lewis Money Show Live on ITV, the financial guru’s 'big briefing' section of the programme focused on holidays and how to make sure you get the most value for your money, especially when using a foreign ATM.
In a pre-recorded film from Malaga in Spain, Martin explained that the current exchange rate gives 1.185 Euros for every £1, but that some cash machines will charge additional fees - even if you’re using a specialist overseas card which is designed to match the current exchange rate.
Martin’s experiment involved withdrawing 200Euros, the equivalent to £169 to highlight the different fees certain cash machines can charge.
He said the first thing to watch out for is a fee for using the cash machine - some of the ATMs he used charged between 3.50Euros and 7Euros on top of the withdrawal.
Martin explained the only way to get the lowest fee is to try different cash machines as the additional charge is set by the ATM owner and can’t be defeated.
Martin moved on to explain that the “big one” to watch for is the exchange rate the ATM will try to charge you.
He read out the onscreen message on one cash machine which said: “Here we give you the option to operate with currency conversion, make sure you understand the cost of currency conversion before you carry on.”
Martin highlighted how it carried a 4.5% mark-up fee, which meant the ATM would charge this on top of the exchange rate plus a fee for using the machine - in this case it was 7Euros.
Martin said: “Even the worst card, never mind my specialist card that gives perfect rates, only adds a 3% conversion [fee].”
The consumer champion tested several ATMs and they had conversion mark-ups of up to 4.5%.
Martin said: "So, you do not want this machine to do the conversion for you, you want your card company at home to do the conversion because even if it's not a good card, it's at a better rate."
He then warned that cash machines may attempt to use "psychological scare tactics" to push you to use their conversion rates by using an onscreen prompt which states “if you do not accept this option, we cannot guarantee the exchange rate offered”.
Martin also did the maths to show that withdrawing money without allowing the ATM to do a conversion cost £169.20, excluding the ATM fee, but using the machine’s rates would have cost him up to £191.
Martin advised: "Do not pay to pay.
“When you got into a shop, when you go to a cash machine and it says 'do you want us to do the conversion for you' - no, no, no - pay in the local currency.”