Best credit cards to use on holidays abroad

Summer is here and many of us are heading abroad. These credit cards won't charge you for using them in foreign countries.

Using the wrong credit card abroad can cost you a fortune.

Fortunately, there are still a handful of cards that don't charge rip-off feesabroad overseas. 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.

Another 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.

This means you can claim compensation either from the merchant or your credit card provider.

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.

Keep in mind that the exchange rate each one offers will be different and you might want to take that into consideration when you're comparing deals.

Why use a credit card for spending abroad?

You could of course choose to pay for things with your debit card.

However, the big benefit of using a credit card is that you're protected if any purchases you make over £100 turn out to be faulty or damaged.

Under Section 75 of the Consumer Credit Act, you can claim compensation either from the merchant or your credit card provider.

So let’s take a closer look at the credit cards that don't charge you for using them abroad.

Post Office Money Platinum

The Post Office Money Platinum credit card won’t charge you a fee for any purchases you make overseas. This is also the case if you make any online transactions from home in a foreign currency.

You can also avoid a cash advance fee when using the credit card to order currency or travellers cheques with the Post Office.

Unlike many other travel credit card deals this one comes with a 28-month interest-free period on purchases.

However, be warned that after this introductory period you will be charged a representative APR (the annual cost of interest and charges) of at least 18.9%.

Santander Zero

The Santander Zero card offers fee-free spending around the world.

You won’t have to pay any foreign transaction fees on purchases and there’s no fee to withdraw cash at an ATM while on your travels.

Just watch out when withdrawing cash on a credit card as interest (in this case 18.9%) is charged as soon as you take the money out.

With the Santander Zero card you can also earn up to 15% cashback at selected retailers through the Santander Retailer Offers programme.

The card does not charge a monthly or annual fee and comes with a representative APR of 18.9%.

Santander All in One

The Santander All In One credit card is also free to use abroad.

There’s no foreign transaction fees on purchases or cash withdrawals in the local currency.

Plus, you can earn 0.5% unlimited cashback on all your spending. There’s also up to 15% cashback when you shop through selected retailers via the Retailer Offers programme.

Again, it’s worth pointing out that the card shouldn’t really be used for cash withdrawals as a higher rate of interest (29.9% in this case) will be charged immediately.

The Santander All in One card comes with a £3 monthly fee and a representative APR of 21.7%.

Halifax Clarity

The Halifax Clarity card won't charge you for purchases anywhere in the world and if you apply for one before 2 September 2017 you can get £20 cashback.

If you make any cash withdrawals, you won't be charged a fee but you will be charged interest (18.9%-25.95%) from the date the withdrawal is made – so you should still avoid using this card at an ATM if possible.

The representative APR on this card is 18.9%.

Saga Platinum

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.

You’ll also get nine months of interest-free spending and balance transfers (3% fee) with this card along with a representative APR of 11.9%, making it affordable enough for regular use.

Unlike the majority of credit cards, with the Saga Platinum credit card you'll also benefit from 55 days interest-free on cash withdrawals – meaning that if you do take out money from an ATM abroad, you won’t be charged interest providing you clear your balance within 55 days.

After that, the interest rate jumps to 19.61% and this will be charged from the date you withdraw your money. You should also bear in mind there is a 2% fee (minimum £2) for withdrawing cash on your credit card.

Generally speaking, using a credit card to withdraw cash is a rubbish idea. But if you need to, this is probably the card to use.

Aqua Advance

The aqua Advance card is designed for people with a less-than-perfect credit rating, but is also a very good piece of plastic for taking abroad as there are no fees for foreign purchases.

However, as it’s a card aimed at people looking to rebuild their credit score, it comes with a very hefty representative APR of 34.9% – so make sure you pay off your balance in full each month.

If you get into the habit and do this, you could get the rate reduced to 19.9%.

Nationwide Select

If you have a Nationwide FlexDirect current account, Flex Account (extra conditions apply) or FlexPlus account, you're 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 0% on purchases and balance transfers with no balance transfer fee. The representative APR is 15.9%.

How they compare to debit cards

Cumberland Building Society, Metro Bank and Norwich & Peterborough Building Society (now closed to new customers) offer accounts with debit cards that offer fee-free spending abroad, although Metro Bank now limits it to Europe only.

Virgin Money's Essential current account offers fee-free debit card purchases but charges £1.50 per cash withdrawal. Several other high street banks also don't charge fees for cash withdrawals in certain countries.

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.

Compare credit cards that don't charge for overseas use