If you’re going away, travel credit cards can be a good way to spend while you’re there. Travel credit cards work just like a standard credit card, but they don’t charge big fees for using them abroad like many standard credit cards do.
You pay for purchases on your card, and then pay the balance back later.
It’s sensible to search for the best travel credit card with the lowest fees (or no fees). If you can find a credit card with no charges for using it abroad, you’ll be able to keep your costs down.
Using a credit card abroad
You’ll have no problems using a credit card abroad. But remember, with a standard credit card, you’re likely to be charged expensive fees for using it overseas.
Your standard credit card might give you 0% on purchases or a low interest rate at home, but charges for using it overseas could be high. This could lead to a nasty surprise when you get your credit card bill.
You’ll be able to avoid paying these fees by searching for the best travel credit card on the market.
Travel credit cards are designed especially for use overseas and don’t charge hefty fees. Some travel credit cards might even let you take cash out while you’re abroad without paying a fee, although these are rare.
How to find the best travel credit card
To find the best credit card to use abroad, and keep your costs down when spending outside the UK, use our comparison table at the top of this page. We’ll help you compare deals and find the best overseas credit card by checking the fees each one charges. Then you can choose the best travel credit card to take with you on your trip.
Here are some of the fees you might come across when using a credit card abroad.
Credit card foreign transaction fees
On every transaction you make using a credit card abroad, you’ll pay a transaction fee. This is usually a percentage of what you’re spending. For example, if your transaction fees are 2.5% and you spend £300 on a holiday excursion, you’ll have to pay your credit card provider £7.50. It’s best to look for credit cards with no foreign transaction fees when searching for the best travel credit card.
Cash withdrawal fees abroad
These are the fees you’ll pay for taking money out at the ATM. Cash withdrawal fees are usually charged as a percentage of what you withdraw. For example, if your cash withdrawal fees are five per cent, and you take £200 out of a cashpoint abroad, you’ll be charged £10 for doing so.
Can I get free cash withdrawals abroad?
Some travel credit cards let you take cash out while you’re abroad without paying a fee, although it’s rare. If you think you’ll want to visit an ATM on holiday, it’s worth checking this out when you compare the best credit card to use abroad.
Interest on cash withdrawals from credit cards
Credit cards charge interest on cash withdrawals. You start paying interest from the day you take the cash out, and you continue until you’ve paid off the balance. The interest rate is usually higher than your annual percentage rate (APR).
Foreign exchange rates
The company that processes your card transactions sets the exchange rate that you’ll get for converting pounds to the local currency. This will affect how good a deal you get. These companies include Visa, MasterCard, or American Express.
To find the best overseas credit card, try to find one that gives you one or more of the following benefits: no transaction fees; no cash withdrawal fees; and/or a lower interest rate on cash withdrawals.
Where can I use my credit card?
You can use an international credit card in most shops, restaurants or other businesses, or in ATMs.
Many businesses put a sign up to advertise to you which credit cards they accept. You’ll know you can use your card if you can spot its logo on display.
What alternatives are there to travel credit cards?
If you’re going abroad, of course you can take cash, your debit card or travellers’ cheques.
But another good option is to get yourself a prepaid travel card before you go.
Prepaid travel card vs. travel credit card
A prepaid travel card is a safe way to spend money abroad. Because it’s pre-loaded, you can’t overspend and go into debt, so it’s great for budgeting purposes.
If the card is lost or stolen, your provider can cancel it quickly and easily. They’re accepted globally and can often be a cheaper way to spend abroad.
Although most prepaid card providers charge you for using them abroad, they do not charge interest. Some even come without international fees.
Others do charge fees for using them, or even for buying them, so you’ll need to check. It’s also important to remember that you have to pre-load the card with money, so it’s not a way to borrow money like a travel credit card is.
But what’s great is that everybody can get a prepaid travel card, whatever their credit history.
On the other hand, a travel credit card is a way of borrowing money, so you can spend more than you have. This might help you to make the most of your holiday.
By searching for the best travel credit card, you should be able to find one with no foreign transaction fees. Plus, exchange rates on a travel credit card are usually pretty competitive.
Sometimes a travel credit card can also give you special rewards when you spend, too, such as cashback, travel incentives or vouchers.
The downside of a travel credit card is that you might find they have higher interest rates and monthly or annual fees. Plus, not everybody is guaranteed to be accepted when they apply for a travel credit card. And there are certain countries that don’t accept Visa, MasterCard or American Express, so you should check this before you leave.