Using your credit card abroad can often lead to high charges, so specific cards are now on the market to serve those customers who need to spend overseas.
Using standard credit cards abroad incurs a currency conversion fee from the card provider, typically of around 2.75% of the value of the transaction. It’s also possible that you’ll be charged up to a frightening 6% in hidden charges, plus you’ll immediately start incurring interest if you withdraw cash from your credit card.
You’ll also often be charged for using your debit card abroad. Nationwide used to be the only notable exception to this rule but it has now started charging 1% on some transactions abroad.
That’s why we think pre-paid currency cards are now the best cards to use to spend abroad, as they are free to get and don’t charge for ATM withdrawals and overseas transactions.
As if 2.75% wasn’t a substantial enough fee, a new trend in foreign shops, restaurants and hotels could end up costing you even more. When travelling, if you are offered the chance to pay in sterling, beware: the exchange rate will invariably be poor, and cost yet more than a standard credit card. So always, always, always pay in the local currency if you are given the option. And demand it if you’re not.
If foreign travel features highly in your financial plans, it’s worth researching this well and saving yourself dollars, Euros, and ultimately pounds.
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