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I will be soon travelling to London and I wanted to get a bit of advise from those who have been there already. Would you guys prefer using credit / debit card in café and shopping malls or should we be using cash? I assume for every card transaction I make there will be an international transaction fee because I will be using my Australian credit / debit card. Whereas cash transaction will only be for the price of purchase. Any other relevant advise related to finance and spending would be awesome. Thanks heaps in advance.

  • Without knowing what exchange rate your supplier charges for purchases and cash withdrawals and what the fee is this is going to be hard to answer. I never use cash in London but I have a UK card which does not charge a fee. – mdewey Oct 12 '17 at 11:04
  • You have a UK card because you live in UK or I can get one too in Australia? Also, I meant to withdraw cash here from Australia and take it there to London. I know cash withdrawals by an Australian card in UK will cost a lot. – PHP Developer Oct 12 '17 at 11:30
  • Does your card support rfid ? Otherwise it'll be very tedious. I would definitely use cash for small purchases. You will also find that especially independent small shops charge extra for the use of a card below a certain value. This is technically not legal, but common. Pay anything above £20 with a card. – Marianne013 Oct 12 '17 at 11:54
  • It depends on the specific fees for your bank and card. Generally, I think paying with credit is cheaper. – ugoren Oct 12 '17 at 15:48
  • In the busier parts of London you'll find it invaluable if you have a contactless payment card. Whether or not the fees are worth the reduced hassle is another question. – Muzer Jan 8 '18 at 17:28
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For the last 15 years of travel, I have largely relied getting cash from ATMs, and using credit cards for things like hotel bills and car rentals.

In the UK, some smaller places might not accept cards, but in most cases cards or cash are acceptable. Amex/Diners cards have much lower acceptance than Visa/Mastercard.

It is an unwelcome fact that wherever/however you spend your money abroad, you will have to pay a fee along the way. Do your research on what fees apply and in what cases, but here is what I have found in general:

  • If you buy foreign currency before you leave, you will have to guess how much you will need, pay a fee and then carry around great wads of cash with you.
  • If you do card transactions at checkouts, your bank/credit card company will probably charge you a fee.
  • If you use an ATM to get cash, your bank/credit card company will probably charge you a fee. The ATM company might also charge you a separate fee (most bank ATMs are free, but some ATMs in convenience shops and bars charge a fee of up to £2).
  • I've not used one, but if you bring a pre-paid currency card, there is probably still a fee somewhere in the process. Anyway, make sure it it backed by Visa or Mastercard and you have a reliable way to top it up.
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You really need to look at the terms on your card. The advantage of getting cash is that you can spread a fixed per-transaction fee across a bunch of purchases. The downside is that card issuers often charge extra for cash withdrawls. If you have a fairly ordinary card then your best bet is probablly to use cash for small transactions.

If you are going to use London public transport for more than a day or so and you don't have a travel card with no per-transaction fees then you probablly want to get an oyster card. Contactless travel on london public transport is billled on a daily basis, so fees can quickly build up on foreign cards.

  • Perhaps worth pointing out that if the OP wants to use a London bus cash is not accepted which makes your last paragraph even stronger. – mdewey Jan 8 '18 at 16:48
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    Each card has its own set of rules for fees, with my cards I pay a percentage on each use for paying with the card and a set fee per transaction for ATM use. With the amounts I usually get out, they work out to the same cost per pound used. So do not assume that one system is always cheaper. – Willeke Jan 8 '18 at 19:07
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You should investigate the Australian market looking for cards which are intended for travelers. There are some marketed to UK residents which have no foreign currency charge and reasonable exchange rate conversions when used outside UK.

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I use cash for small purchases and credit card for large payments. Check your credit card transaction fees and whether you need to declare you'll be out of the country. Some credit card apps allow you to schedule trips. MasterCard claims that I don't need to but I ran into issues when I went to Paris. Check to see if your bank has a connection with UK banks for cheap or no fee ATM transactions. For me, it was Barclays.

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You should note that the UK’s smallest denomination bank note is £5. I prefer to use card when visiting if only to avoid coins especially for smaller purchases. My bank charges a fixed percentage for foreign transactions so it might be different if a fixed amount per transaction is charged. .

  • Use your coins as soon as you get them in and you never need to worry about too many. Just remember that coins are worth money (unlike the USA ones which are just small change.) Many small shop owners prefer to deal with cash, not cards, for reasons which make sense to them if not to you. – Willeke Jan 13 '18 at 12:00

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