I know that my Nationwide debit card is the best card to use for withrawing cash abroad since no commission is charged, but how to know which is the best card for purchases?  I have a French bank account and do not usually use a card for purchases, but the other day I made a purchase at Geneva airport and tried to use my Nationwide card.  I noticed that a small screen at the checkout indicated the cost of my purchase in both Swiss francs and sterling (which having looked at Moneysupermarket I now realise was an example of dynamic currency conversion).  But my PIN didn’t work and so I used a Morgan Stanley credit card instead, and was very interested to notice that the cost in sterling came up as less than it had done for the Nationwide debit card.  How to know which card offers the best exchange rate on any given day?

Sorry I meant to write more than just that! Before the above post, I was meant to have also put the following (which should make more sense of the above!)...

I found it almightly tricky to compare what the best thing to do with my money abroad - get cash from the Bureau de Change? Use cards abroad? If so, Credit or Debit Cards? And which company was best? Post Office seemed cheap but was it? etc.

Well after a bit of research I thought I'd present my findings.. I compared the Post Office Credit Card and Nationwide Credit Card and Debit Card (as I'd heard they were the best) (true on the whole) and looked at the Debit and Credit card of the bank I'm currently with - NatWest. In a nutshell, NatWest seem to be a hell of a lot more expensive. I haven't looked at other banks, so don't know about them.

In SUMMARY, it seems cheapest to take cash with you (but may have risk of being stolen).

IF you want to make PURCHASES abroad by card, use your Post Office or Nationwide Credit Card (best one depends on Exchange Rates) or Nationwide Debit Card. Those are all free of charge. DON’T use NatWest.

If you need to WITHDRAW CASH, use your debit card – Nationwide rather than NatWest. (IF have to use Credit rather than Debit Card for some reason, then use post Office Credit Card as has lower Interest Rates, but best to avoid Credit Cards for this.) DON’T use NatWest.

Quick legal disclaimer: I'm not an expert and no one has double checked my calculations (or my sources of information), but I have done my best to provide accurate information. However, some information could be wrong or misleading - I hope it isn't, but consider it all with caution - and let me know if there's any faults you spot...

Details...

Exchange Rates - Note, just because you go somewhere that's commission free, doesn't mean there aren't other 'hidden' charges. Each bank/company offers different exchange rates and these I gather can vary considerably from place to place, but also who gives the best rate depends on the day and the currency. For my comparisons I looked at the end of 02/05/07, at Nationwide, NatWest and Post Office for how many Euros, US DOllars, and UEA Dirhams to the pound sterling - just because those are three currencies I've needed in the past. Results... Euros – Best rate is Nationwide (at 1.4019); 0.44% higher than lowest (Post Office at 1.3958)
USD’s – Best rate is Nationwide (1.9137); 0.88% higher than lowest (Post Office at 1.8971)
UAE Dirhams – Best rate is NatWest (7.0505); a staggering 2.35% higher than lowest (Nationwide at 6.8889)

Post Office Credit Card

Purchases – As above exchange rate (assuming you pay off in full at end of month or whenever monthly deadline is; else is 1.1% or 1.2% to 1 d.p. monthly interest, depending on card type).

Cash Advance (ie. ATM’s) - Add on 2% for each Cash Advance (min £2) plus 1.3% or 1.4%  to 1 d.p. monthly interest, depending on card type until date paid off (which would normally be within a month). Unlike Purchases there is no interest free period – interest charges from day Cash Advance is provided. So, assuming pay off bill in full at end of month or whenever monthly deadline is, charge is effectively up to 3.3% or 3.4% * (with min £2).

NatWest Debit Card

Purchases – As above exchange rate plus 2.65% conversion fee plus £0.75 charge for each purchase. So charge is 2.65% plus 75p fixed charge.

Cash (ie. ATM’s) - Add on 2.65% conversion fee plus 2.25% (Max £4) charge for each cash withdrawal. So charge is effectively 4.9% (with a partial cap).

NatWest Credit Card

Purchases – As above exchange rate plus 2.75% conversion fee (assuming you pay off in full at end of month; else is 1.2% or 1.3% to 1 d.p. monthly interest, depending on card type). So charge is 2.75%

Cash Advance (ie. ATM’s) - Add on 2.75% conversion fee and 2.5% charge for each Cash Advance plus 1.9% to 1 d.p. monthly interest, depending on card type until date paid off. Unlike Purchases there is no interest free period – interest charges from day Cash Advance is provided. So, assuming pay off bill in full at end of month or whenever monthly deadline is, charge is effectively up to 7.15% *.

Nationwide Debit Card

Purchases – As above exchange rate.

Cash (ie. ATM’s) - As above exchange rate.

Nationwide Credit Card

Purchases – As above exchange rate (assuming you pay off in full at end of month or whenever monthly deadline is; else is 1.2% to 1 d.p. monthly interest).

Cash Advance (ie. ATM’s) - Add on 2% for each Cash Advance (min £2) plus 1.5% to 1 d.p. monthly interest, until date paid off (which would normally be within a month). Unlike Purchases there is no interest free period – interest charges from day Cash Advance is provided. So, assuming pay off bill in full at end of month or whenever monthly deadline is, charge is effectively up to 3.5% * (with min £2).

NOTES

* = Actually ‘Interest Free’ Period for each monthly set off Purchases, etc, is up to 56 days – so potentially you may in fact wait more than 1 month between Transactions and Paying them off, in which case Interest Rate on Cash Advances will exceed 1 month.