Is it better to change your pounds for euros at home or when you get to the island? Are cards accepted everywhere? Are there free ATMs? Can I pay with my smartphone? We answer these questions and more…

Currency Exchange in Tenerife

Is it better to change your money in the UK or in Tenerife?

The best rates for exchanging pounds (GBP) to euros (EUR) can be obtained by pre-booking online via a service such as the one offered by the UK post office. The rates offered in walk-in Bureau de Change offices or Banks branches will always be worse.

Exchange rates and fees at ATMs

The most convenient way to obtain currency is to simply withdraw from an ATM on arrival. However, the costs of doing so will vary considerable according to who you bank with, and the fees charged by the ATM operator.

As an example, some UK Banks (such as Lloyds) have very high fees for withdrawing cash abroad, and you could be charged around £4.50 by your bank for a €100 withdrawal (2.99% currency transaction fee + £1.50 foreign currency cash fee). On top of this, some ATM operators (BBVA are known to be expensive) will charge up to €6 per transaction – meaning that your €100 cash withdrawal has now cost you more than €110.

You can avoid these fees though: firstly, check the fees charged by your bank before leaving home. If your bank does not offer competitive rates, consider getting a pre-paid card from a service such as Revolut (which you can pre-load with euros in advance), or an account that offers fee-free withdrawals such as that offered by Starling Bank. Secondly, avoid using expensive ATMs: BBVA and Euronet machines are known for being expensive, Santander machines are free for Santander’s UK customers (though expensive for everyone else), and Banca March are fee-free (there is a Banca March ATM in Tenerife South Airport in the Arrivals Hall).

When withdrawing cash using a card associated with a non-euro account (i.e. your UK sterling bank account), you will be presented with the option to be charged in either euros (EUR) or pounds (GBP). It is nearly always cheaper to choose EUR and let your bank perform the currency exchange transaction, since you will likely be offered an unfavourable exchange rate by choosing GBP. That said, if your bank has especially high fees for using your card abroad, this might not be the case.

Paying with Credit/Debit Cards or Google/Apple Pay

Contactless payments via Credit or Debit Cards and Smartphones are accepted nearly everywhere in Spain – especially since the pandemic. The minimum purchase amounts that businesses used to require when paying by card are largely gone and supermarkets are happy to accept card payments even for transactions under €1. You can even pay your taxi driver or bus ticket using your contactless card or smartphone. However there are still a few exceptions where visitors to Tenerife will need to pay using cash:

Some Small Bars and Restaurants There are still quite a few bars in the touristy areas of Tenerife that only accept cash, though this is usually made clear to customers.

Tips Nobody likes receiving tips by card, there is commission to be paid to the bank, and it’s possible that your waiter or waitress will never receive a tip paid by credit card.

Exchange rates and fees when paying by Credit or Debit Card

As with cash withdrawals, exchange rates and fees charged vary by bank. You should check these rates, which are usually published on the bank’s website, before using your card in Tenerife. In a worst-case scenario, your UK bank may charge a fixed per-transaction fee for using your debit card abroad (sometimes £0.50 per transaction). While this might not sound like much, it can quickly add up if you are using your card contactlessly to pay for small beers in a bar!

Again, as with cash withdrawals, you will be presented with the option to pay in either EUR or GBP, and it is nearly always better to choose EUR and allow your bank to perform the currency exchange transaction.

A good place for UK residents to start shopping around for the best currency exchange deals and to find the best travel credit and debit cards is the travel section on the Money Saving Expert website.

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