We are used to keeping control of our expenses by using credit card for all of our purchases. But there are fees and exchange rates involved in international credit card operations. So I decided to check better options.
I called each credit card we own and asked for the charges I would incur in case I used them for purchases in any of the British countries.
It turns out that you pay a fee of around 3% for each purchase and of course there's the exchange rate which will always be the highest possible.
I called a few places to see what was it like to buy cash. Our bank, Bank of America, was the best option for buying British cash. We checked travel agencies and the AAA. Do your search as well. Maybe call a few banks.
It turned out that, in considering the fees for credit versus cash, cash is the best choice when you travel overseas.
(what to fear):
Travel carrying a large amount of cash, especially to a place you don't know, makes me nervous. Should you carry that cash with you at all times or leave at your lodging place? Both options sound like a bad idea.
Grandma made me one of those money travel pouches (the one that attaches to your body and that's the best way to carry your large amount of money. The only way you can lose that is if you actually get arm-robbed and, well, groped. Just don't go into dark alleys, ok! I guess that takes care of that.
I investigated an option I had read about in one of the credit card or the bank website (and seen it in Rick Steves videos) - Banks overseas will allow you to take cash from their ATMs. Some banks might be linked to your bank, so there will be no fees (or very low fees). We figured we would bring enough cash to pay for our expenses for the first couple of days. and get more cash there as money started to run low. This was a mug-proof plan: in case we were robbed, we would not lose large amounts of money.
Fourth (don't get your or your spouse's cards canceled):
Call all your credit cards and let them know you'll be overseas and on what dates.
It might sound RIDICULOUS, but if you have a joint account with your travel partner, EACH OF YOU HAVE TO CALL FOR EACH OF YOUR JOINT ACCOUNT CARDS. I called to say I'd be traveling with my husband and they only authorized my card - so when we tried to use his, they blocked the card, and (worse!) called our house to ask whether or not we had used the card in England ... well... needless to say we were not there to answer the phone ... so they went ahead and CANCELED his card.
Fifth (booking with a security deposit):
If you have a Paypal account, see if they take Paypal for the security deposits. If they do, make sure that your Paypal fund is coming from your bank account and not from your credit card. The credit card will still charge you conversion fees, even if through Paypal. The bank account won't. It doesn't matter what kind of cash back rate you get with your credit card, it still won't be higher than the fee they will charge you.
If booking over the phone, ask if they can just hold your card number as a security, and tell them you'll pay it all in cash when you get there. Most places we called did that for us.
When booking car rentals you will usually have to use your credit card, because car rentals are usually paid locally and they work with credit cards.
We tried to pay cash and they would not take it. It doesn't mean I will stop asking, though.
If you pre-pay, try to get an agency that will give you charge local.
Worst-case scenario, take the bite. After all, your vacation is more important than your credit card fees.