Can You Spend Euros in the UK? Sometimes, But Here's What Happens When You Do...

Are you returning home from a European holiday and wondering whether you can spend your unused euro banknotes in the UK? Or perhaps you're an EU resident visiting the UK and wondering if you can use your euro-based credit or debit card at British payment terminals? In either case, while the answer differs slightly, you'll need to be wary of one thing in common: hidden exchange rates.

In this short explainer, we delve into when and where it's possible to spend euros in the UK, why it's generally a bad idea, and what a few alternatives might be instead.

Can You Spend Euro Cash in the UK?

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If you've ever arrived home from Rome or Mallorca or anywhere else in the Eurozone, there's a good chance you'll still have a wad of euro banknotes in your wallet, and it can be tempting to think about spending it in the UK. But can you spend euro cash in the UK in the first place?

The short answer is usually not. Although there are some establishments that accept euro cash in the country, a vast majority of them do not. For example, tourist sites in London and surrounds are more likely to accept euro banknotes, but restaurants, shops, and other day-to-day business will rarely. Here's a list of places you might expect to be allowed to pay with euro cash in the UK:

• Big restaurants (e.g. McDonald's) in airports or city centres,
• Some superettes or mini-marts in city centres,
• Big retail stores (e.g. Marks & Spencer) in city centres,
• Cheltenham Festival,
• Welsh monuments (e.g. Cadw).

What Happens When You Spend Euro Cash in the UK

If you do pay with euro cash in the UK, the first thing that'll happen is that you'll be given your change in sterling. That's because British businesses don't typically keep euros in their cash on hand.

The second thing that will happen is you'll be charged at an abysmal exchange rate. For UK businesses handling euro cash, it's common to charge a premium on top of existing exchange rate conversion costs simply because they know customers with euros will be eager to convert their currency regardless of precise rates. For example, don't be shocked to find atrocious exchange rates of around £0.6 for every €1 you exchange, a margin of over 30%!

What To Do With Your Euros Instead

Unless you're desperate to get rid of your euros and don't mind the high rates, we recommend doing the following with your euros instead:

Option 1: Hold Onto Them

Especially if you have a small amount of euro cash, the best thing to do is keep it. After all, you might well visit a Eurozone country again sooner or later, and having those euros could be helpful before you make your first cash withdrawal there. Or, if a friend or family member is visiting the Eurozone soon, you could consider giving the cash to them too!

Option 2: Visit an Exchange Bureau

Currency exchange bureaus or bureaux de change are desks where you can exchange cash in one currency for another. They're commonly found in British airports and city centres. However, although their exchange rates are better than what you'll generally find from retailers, they're still relatively poor, typically hovering between 3% and 8% for euro-to-sterling exchanges.

For this reason, we recommend Change Group, whose rates are a bit lower than the market average at only around 2.6% for EUR-GBP conversions. You can arrange your conversion online and pick up your sterling at any of their branches, which can be found in airports and city centres around England:

Can You Spend Euros on a Card in the UK?

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Whether you're a Brit with a leftover euro balance on your multi-currency card or a visitor from Europe whose credit or debit card is denominated in euros, it's very easy to spend euros on a card in the UK. All you need to do is use your card like normal (whether it's a POS payment or cash withdrawal), and the currency exchange will happen automatically behind the scenes.

Fees to Spend Euros on a Card in the UK

However, just as before, fees are involved — and some might not be so obvious. Here are the two types of fees you'll probably encounter when spending euros in the UK with your card:

1. Currency Conversion Fee: This is a fixed fee or commission that your bank or card provider might charge you whenever you pay with your card in a foreign currency (e.g. euros in the UK). Some banks and providers don't charge these fees, but most do. In our experience, they're usually between €0.50 and €1.50 per transaction as a fixed fee or 0.5% to 2% as a commission (although, depending on your provider, they could be higher still).
2. Exchange Rate Margin: This is a less transparent fee that your bank might charge to convert currencies. It arises when your bank, using the 'real' mid-market exchange rate (i.e. the one you see on Google) to convert your euros into sterling then applies a worse exchange rate on your transaction, leading to a markup of anywhere between 0.5% and 5% in extreme cases.

How to Spend in the UK Instead

Because of the fees we saw above, it's generally much cheaper to pay with British pounds directly when using your card in the UK. There are two ways you can do this:

Option 1: Choose a Bank Without Conversion Fees

Some banks let VISA or Mastercard handle the conversion and don't charge any fees of their own, essentially bearing the costs themselves. Be sure to check the 'Fees' section of your bank's terms and conditions to find out what they charge for processing a foreign currency transaction. If you live in the EU, N26 is an excellent mobile bank that charges €0 for currency conversion!

N26 is a fully-authorised German bank operating across the EU, and provides you with a debit card and very low fees all around.

Option 2: Use a Travel Debit Card

If you're already happy with your bank, you can sign up for a multi-currency account and get a travel debit card supporting balances in both pounds and euros. Revolut is one of the best examples of such a service! With Revolut's state-of-the-art mobile app, you can easily exchange between balances in the two currencies (and over 30 others) at very low exchange rates on the weekday (though fair use limits and weekend surcharges may apply).

Even if you have both euros and pounds on your account simultaneously, if you use your debit card in the UK, the card will automatically detect your country and start using the GBP balance first.