There are lots of ways to manage your money whilst abroad. Traveller’s cheques, credit cards and foreign currency are all popular ways of looking after your holiday spending but you can also consider a travel charge card.
The best travel charge cards can offer convenience, competitive fees and additional perks and benefits to cardholders.
What are charge cards and how do they work?
Using a charge card for travel offers lots of benefits. You can use your charge card to buy goods and services whilst you’re abroad, such as car hire, meals and accommodation. And, like a credit card, you will receive a monthly bill detailing the transactions you have completed using your card.
However, unlike a credit card you have to repay your charge card balance in full every month. You can’t maintain a balance as you can with a credit card. However, as you pay off your balance every month you won’t ever pay interest charges, although you will usually need to pay an annual usage charge.
What to look for in the best charge card for use abroad
Using charge cards overseas can help you keep track of your holiday spending and offers a convenient way to meet the costs of your trip. The best travel charge cards also offer additional travel perks such as a concierge service or travel insurance.
When you compare charge cards for abroad use, there are various factors you should consider:
- Fees and charges including international charges
- Application criteria
- Any loyalty or rewards scheme
When you are looking for a charge card for travel it’s important that you carefully research any fees and charges that apply to the card.
As you don’t pay interest on a charge card you will generally pay an annual fee and this can range from £15 to £300.
If you’re planning to use charge cards overseas you should also compare the charges that apply to the card for international usage. Some cards don’t charge a fee for overseas transactions whereas others charge up to 3%, which could cost you a significant sum if you’re planning to frequently use your card abroad.
You should also research any specific underwriting criteria that apply to your chosen travel charge card. Some cards have a minimum income requirement which you’ll need to meet.
Many charge cards also offer rewards or loyalty programs. These allow you to collect points based on your card spending which you can then redeem for perks and benefits such as vouchers, cash back or flights.
While these schemes are attractive, it’s generally not a good idea to select your charge card for travel simply on the basis of the rewards scheme. You could end up paying significantly more in charges and fees for relatively low value benefits.
Instead it's best to find suitable charge cards with the lowest charges and then choose between these on the basis of the rewards they offer.
