Follow this topicThe best credit cards to use on your travels
Looking forward to going abroad? Don't let credit card fees spoil your holiday.
If you’re jetting off on holiday soon, you might be considering how to pay for any purchases you make while you’re abroad.
The problem is that many debit and credit cards charge you for the privilege of withdrawing cash or paying for items when you’re overseas. So how can you get around this?
Fortunately, there are a handful of cards that allow you to use them abroad without charging you rip-off fees. Bear in mind that the exchange rate that each one offers will be different and you might want to take that into consideration when you're comparing.
The big benefit of using a credit card is any purchases you make over £100 are covered if they turn out to be faulty or damaged by Section 75 of the Consumer Credit Act. You'll also be better protected in the unfortunate event that your card is fraudulently used.
Let’s take a closer look at the cards that don't charge you for using them abroad.
1. Aqua Reward credit card
The Aqua Reward card is actually designed for people with a less than perfect credit rating but is also a very good piece of plastic for taking abroad. There are no foreign currency exchange or transaction fees. What's more, it pays 3% cashback on all your spending, up to a maximum of £100. However, as it a card aimed at people looking to rebuild their credit score, it comes with a very hefty representative APR (the annual cost of interest and charges) of 34.9% – so make sure you pay off your balance in full each month.
2. Halifax Clarity and Clarity Rewards credit card
Halifax offers two credit cards that won’t charge you a fee for using your card anywhere in the world – Clarity and Clarity Rewards. Both have a representative APR of 12.9%.
If you make any cash withdrawals, you won't be charged a fee but you will be charged interest from the date the withdrawal is made – so avoid doing this if at all possible.
The Clarity Rewards card pays you £5 for every month you spend £300 or more, so it's a decent reward card in its own right, regardless of how often you go abroad. However, you need to be a Halifax current account customer to get hold of one. You can apply for one in a branch or on 08457 28 38 48. The Clarity card is open to anyone with a good credit history.
3. Post Office Platinum credit card
The Post Office Platinum credit card won’t charge you a commission fee for any purchases you make overseas. This is also the case if you make any online transactions from home in a foreign currency.
What’s more, for the first three months, any purchases you make will also be interest-free! However, be warned that after that period you will be charged an interest rate of at least 16.9%. So make sure you have paid off your balance in full by the time the three months is up and that any purchases you make after that are also paid off in full each month.
If you use your credit card to order currency or travellers cheques with the Post Office, you’ll also avoid paying a cash advance or handling fee. However, while this is highlighted as a benefit, you’ll be charged interest at 24.10% from the date the money is taken from your account.
4. Saga Platinum credit card
If you're aged 50 or over, the Saga Platinum credit card will also let you sidestep foreign currency fees when you use your card for spending overseas. There’s also nine months of interest-free spending with this card. Just bear in mind that after this point, you’ll be charged interest of at least 11.9%.
If you don’t clear your balance within this period, the interest rate jumps to a whopping 23.9% and this will be charged from the date you withdraw your money – so don’t get caught out! You should also bear in mind there is a 2% fee (minimum £2) for withdrawing cash on your credit card.
5. Nationwide Credit Card and Select credit card
If you're a new customer, the Nationwide Credit Card allows you to build up an allowance for spending overseas every time you make a purchase in sterling. So for every £5 you spend in sterling, you’ll be rewarded with £1 to spend overseas.
The allowance you’ve earned will appear on your statement each month and there’s no limit to how much you can build up. What’s more, if you don’t use your overseas spending allowance in the first year, you can carry it over.
Take a look at the nifty calculator on the Nationwide website to see how your allowance can build up.
If you spend more than your allowance when you’re on holiday, you’ll be charged a 2% commission fee.
You can also enjoy up to six months interest-free spending. Just make sure you pay off your balance in full before the six months come to an end. The representative APR is 15.9%.
If you're a Nationwide FlexAccount current account customer and you've paid in at least £750 a month for the past three months or you're going to switch to it or have switched to it in the past four months, you are eligible for the Nationwide Select credit card.
This card offers commission-free purchases abroad plus 0.5% cashback on all sterling purchases. It also offers 12 months interest free on purchases. The representative APR is 12.9%.
Withdrawn credit cards
The Sainsbury’s Gold credit card has now been withdrawn to new customers but existing customers can continue to pay £5 a month for fee-free cash withdrawals and foreign purchases and free family worldwide travel insurance.
To make the most of this, make sure you clear your balance in full each month – otherwise you will be charged interest (9.94% for purchases and 24.93% for cash advances).
Related how-to guide
Have a cheap holiday
Find out how to cut the cost of your flights, get discounts, tip correctly, spend wisely, get cashback and most importantly, cut the cost of your holiday.
See the guideThe Santander Zero credit card has also now been withdrawn but if you still have one, it charges no fees for foreign transactions or cash withdrawals. You’ll also be able to enjoy six months interest-free spending (however, the rate jumps to 18.9% after that). Be warned that this credit card will charge you interest at a rate of 27.9% from the minute you withdraw cash.
How they compare to debit cards
Both Norwich & Peterborough Building Society and Metro Bank offer accounts with debit cards that don't charge any fees if you use them abroad. However, the Norwich & Peterborough accounts require you to either fund them or use them each month, even when you're not travelling. Find out more and see how much your bank charges for overseas use in The best debit cards to use abroad.
Prepaid currency cards
Another option is prepaid currency cards. The great thing about these cards is that they allow you to load up your card with funds before you jet off abroad – as well as when you’re out there, making it easier (in theory) to stick to a budget.
Certain cards don’t charge you for making purchases overseas or making cash withdrawals. And because these cards are prepaid, there’s no need to worry about interest rates. What’s more, you’ll generally get a competitive exchange rate. But they do come with some fees, so read the small print carefully.
There is a wide range of prepaid currency cards on the market, from the likes of the AA, the Post Office, FairFX, Caxton FX, Travelex and My Travel Cash. You can find out more and see a comparison for different destinations in The best prepaid cards for spending abroad.
This article is regularly updated with the latest information
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