If you’re heading overseas on holiday or on a business trip, getting a travel credit or debit card could be one of the cheapest ways to spend while abroad.
Often, a regular bank account debit card will charge you hefty fees and a poor exchange rate if you use it abroad for a transaction or cash withdrawal. However, there are lots of cards out there that do away with these fees.
In this article, we outline the best payment cards to use when you’re abroad plus whether it is better to use a credit card or debit card, plus the top prepaid travel money cards.
We explain:
- Best debit cards to use abroad
- Best credit cards to use abroad
- Top prepaid travel cards to use abroad
- Should I use a credit or debit card abroad?
- Is it a good idea to withdraw cash on a credit card abroad?
Read more: Best rewards credit cards
The best travel debit cards
Here we list two banks which offer debit cards that might be worth considering if you’re travelling abroad.
Chase current account
Best debit card to use abroad
Digital bank Chase doesn’t charge fees for making purchases abroad.
Chase also doesn’t charge fees for withdrawing cash while overseas, though you’re limited to withdrawing £500 per day. When abroad you can withdraw up to £1,500 a month.
Chase carries out a “soft” credit check when you apply, which cannot affect your credit score unlike an application for a credit card.
This account gives 1% cashback onyoureveryday debit card spending for your first year, including abroad. The maximum cashback you can earn in a month is £15. Cashback exceptions apply.
Chase also pays 4.1% AER with its linked easy-access savings account, but you can beat this with another savings provider.
You can earn 1% interest on money held in a Chase current account. It also offers 5% AER with its round-up account.
First Direct current account
A Times Money Mentor award-winning current account
One thing First Direct do well is customer service. During the Times Money Mentor awards last year it scored overwhelmingly high in this category and won “The Times readers’ favourite financial app” award to boot.
As a digital provider, which is part of the HSBC banking group, you will only be able to contact its support team via app or website. This is available 24/7, meaning you won’t need to wait for regular banking hours to log any requests.
The current account offers a debit card with fee-free spending abroad, comes with £250 in interest-free overdraft (subject to status), and provides exclusive access to a regular savings account at 7% AER.
– 0% EARvariable on the first£250,39.9% EARvariablethereafter, giving a representative rate of30.5% APRvariable
Starling Bank current account
Another good travel debit card
While Starling Bank doesn’t offer the cashback you get with Chase’s current account, it’s still a great option.
It offers fee-free purchases abroad, and foreign cash withdrawals are fee-free up to a maximum of £300 a day.
Like Chase’s current account, Starling Bank carries out a “soft” credit check when you apply, so it doesn’t affect your credit score.
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Best credit cards to use abroad
Below we list a number of credit card providers that might be worth considering if you’re heading abroad.
NatWest’s credit card makes the list because of its incredibly low rate of interest. Even if you’re credit score isn’t good enough to receive the advertised 12.9% APR interest rate, NatWest will offer you a rate of 18.9% APR at most.
NatWest’s mobile app offers a range of services too, such as being able to load your travel plans onto the app before setting off abroad. This will make transactions in these countries less likely to be flagged as suspicious or blocked.
It’s also worth noting that Ulster Bank and the Royal Bank of Scotland, which can predominantly be found in Northern Ireland and Scotland respectively, offer the same card too.
Representative Example:12.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 12.9% p.a. (variable).
- APR: 12.9%
- Foreign Purchase Fee Within Europe: £0.00
- Foreign Purchase Fee Outside Europe: £0.00
- Account Fee: £0.00
Metro Bank’s is best for those going abroad to Europe. This is because it attract no transaction fees, but in other countries you can expect a £2.99 fee for each purchase.
It also might be a great option if you’re pressed for time. Metro Bank allows you to apply in store at any of its branches and, if your application is successful, it’ll print your card for you immediately. This means you don’t need to wait a couple of working days for it to arrive via post and you can start spending immediately.
Representative Example: 18.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 18.9% p.a. (variable).
- APR: 18.9%
- Foreign Purchase Fee Within Europe: £0.00
- Foreign Purchase Fee Outside Europe: £2.99
- Account Fee: £0.00
This option will only be available for a select few who qualify for private banking, but if you are eligible it does come with a host of benefits.
This includes access to over 1,100 airport lounges across 300 major airports worldwide and a full concierge service. The latter can be a great for paying for your trip before you set foot abroad because its specialists could provide several handy discounts or hotel upgrades.
Representative Example: 19.99% APR variable. Based on assumed borrowing of £1,200. Rate of interest 19.99% p.a. (variable).
- APR: 19.99%
- Foreign Purchase Fee Within Europe: £0.00
- Foreign Purchase Fee Outside Europe: £0.00
- Account Fee: £0.00
One of the perks of this card is that Halifax doesn’t charge any fees on cash withdrawals. However, foreign ATMs may have their own charges so it won’t necessarily be free.
Ensuring you have enough money in cash hand before you go abroad is always wise, so read our guide to the best travel money deals to look for offers best suited for you. But this card could be the least expensive option if you need to make an emergency withdrawal while abroad.
Representative Example: 23.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 23.94% p.a. (variable).
- APR: 23.9%
- Foreign Purchase Fee Within Europe: £0.00
- Foreign Purchase Fee Outside Europe: £0.00
- Account Fee: £0.00
This is one of few travel credit card options which includes a 0% purchase and balance transfer period. Both offers are over a nine month period, making it a great option if you plan on making big purchases abroad and you’re intending on paying back your balance overtime.
Representative Example: 24.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 24.9% p.a. (variable).
- APR: 24.9%
- Foreign Purchase Fee Within Europe: £0.00
- Foreign Purchase Fee Outside Europe: £0.00
- Account Fee: £0.00
Best prepaid travel cards
A prepaid travel card, also known as a currency card, lets you load money and exchange different currencies before you go away. You can then use this card to spend or withdraw cash while abroad.
You can’t spend more than you have loaded onto the card. It effectively works like a debit card that doesn’t have an overdraft.
Unlike a debit card from a FCA registered bank, prepaid travel cards don’t benefit from FSCS protection. So if your provider goes bust while you’re abroad, it might be difficult to reclaim your funds. However, out of goodwill, companies like Wise and Revolut have specific safeguarding practices in place to keep your money secure.
Below we explain why Wise may be worth considering if you’re heading abroad.
Wise
Another good option for people looking for a prepaid travel card
The Wise travel money card lets you spend in53 different currencies.You can load money onto it through its app and use the card in more than 175 countries.
However, it does charge a conversion fee. Check out its calculator to see how much you could pay.
You can also only withdraw two lots of £200 per month before being hit with fees. After that, it charges 50p per withdrawal. There’s also a 1.75% fee on any amount you withdraw above £200.
So again, if you plan to make lots of cash withdrawals then you might be better off with Chase or Starling.
Bear in mind there is also a £7 fee to have the card delivered.
Is it better to use a credit card or debit card abroad?
As long as you find the best – and cheapest – credit card or debit card to use abroad, it’s often a matter of personal preference. It’s worth bearing in mind that using a credit card abroad does give you Section 75 protection, which can get you your money back when things go wrong.
However, you’ll need to go through a ‘hard’ credit check when you apply for any credit card, which could affect your credit worthiness.
Lots of current accounts, including Chase’s, only carry out a ‘soft’ check which does not affect your credit score. So if you have a poorer credit history, it could be worth opting for a debit card.
The costs when using a typical debit or credit card abroad, and not a specialist travel card, can add up. According to Moneyfacts, a data company:
- Purchases on a £50 spend on a typical card:
- A debit card, can charge £1.38
- A credit card, can charge £1.50
- ATM usage on £250 withdrawal using a typical card:
- A debit card, £11.88
- A credit card, £14.95 (before interest is applied)
If your current account comes with a great debit card for use abroad, then you may want to use that.
Look for:
- No fees for spending or withdrawing cash abroad
- A competitive exchange rate
However, if using your bank account looks like it would be quite expensive and you don’t fancy switching, it may be easier to apply for a specialist travel credit card than to open another account.
Read more: Best premium bank accounts
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What exchange rates are used?
When you pay on most debit and credit cards, the Visa or Mastercard exchange rate is used. This is very close to the market rate – so you should not be caught out inadvertently paying extra because you have been given a poor exchange rate. Read more: What’s the best way to transfer money internationally
Watch out for credit cards and ATMs
Unless you opt for a bank that offers fee-free current accounts that do not charge for using a debit card in Europe, which include Chase Bank and Starling Bank, you need to be wary when using an ATM with a debit card.
You can expect even bigger charges when withdrawing cash from a machine using a credit card and that is before interest is applied. Some will charge interest from the day the money leaves your account – even if they may boast of fee-free withdrawals.
Other cards, like Barclaycard Rewards, offer a grace period without charging interest, meaning that you shouldn’t pay any cash withdrawal fees or interest if you clear your balance in full each month.
Safety abroad
Credit cards also tend to be safer to use abroad. If your debit card is hacked or stolen while away, then the money in your account is at risk. This is not the case with a credit card as only the money up to your credit limit is at risk.
There is also something called Section 75 of the Consumer Credit Act. If you have a problem with a purchase of between £100 and £30,000, at home or abroad, the credit provider is jointly liable with the retailer. So if your claim is approved, you should get your money back.
You may be able to use a scheme called chargeback if you paid with a debit card or a credit card for purchases of any amount, not just over £100. Here your bank can claw back the money from the retailer’s bank, although the retailer can dispute the claims.
Read more: Best travel insurance providers
You have fewer rights than under Section 75 because that is enshrined in law and chargeback is not.
The advice if you are travelling is always to have a back-up card with you. A prepaid travel card could be a good option too.
If you are planning a trip away, you might want to make sure you are covered. Find out what you can expect from a good travel insurance policy.
Exchange your money for foreign cash
Sometimes you’ll need cash for your trip abroad. Not all merchants accept card payments and cash can offer a degree of flexibility. That’s why you might want to consider exchanging some of your holiday budget into foreign currency.
Leaving this to the last minute is often a mistake, especially if you use the bureau de change in the airport. These providers typically hike their fees and charge a premium because your options are limited at this point, so give yourself time beforehand to research the best currency exchange offers around.
Read more: The best and cheapest travel money providers
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