The best bank cards to use abroad

    5 March 2020

    Spending money on holiday abroad can work out to be expensive, so it’s important to consider your travel money choices carefully. We’ve looked at some of the best-value options to help your holiday money go further.

    Choose your plastic carefully

    The days of taking a wallet full of foreign currency or travellers’ cheques abroad have long gone, with many of us preferring to use a debit or credit card. But while this can be convenient, the downside is many cards charge fees for overseas use. Foreign transaction fees (charged every time you spend) are often in the region of 2.75 per cent to 2.99 per cent, so for every £100 you spend you could be paying £2.75 to £2.99.

    Anyone withdrawing cash on their credit card will often have to pay a further fee on top, usually around 2.99 per cent, and interest will be charged from the date of the withdrawal, even if the balance is paid off in full that month.

    It therefore pays to look for a card designed specifically for overseas use, such as the Halifax Clarity credit card or Santander Zero credit card. Both cards allow you to side-step foreign transaction fees as well as ATM withdrawal fees abroad. But note you will still be charged interest on cash withdrawals, even if you pay off the balance in full.

    The Santander Zero credit card also offers 12 months interest-free on purchases which could be a bonus if you want to spread the cost of your holiday spending. Just be sure to clear your balance before the 0% deal ends and interest kicks in.
    For those preferring to use a debit card abroad, both the Starling Bank and Nationwide FlexPlus account debit cards won’t charge for overseas use. The Nationwide account has added perks such as worldwide family travel insurance, as well as phone and breakdown cover, but bear in mind there is a £13 monthly fee, so decide whether you’re happy to pay this before applying.

    Consider a prepaid currency card

    Another option is to use a prepaid currency card. This type of card can be loaded with cash in advance and then used in the same way as a debit card. Further funds can be added as and when required. Although there are fees to watch out for, prepaid cards can work out cheaper than standard debit or credit cards. Just be aware that not everywhere accepts them, including car hire firms, some hotels and petrol stations.

    One option is digital bank Revolut which offers fee-free spending in more than 140 currencies and charges no fees for withdrawals, providing you withdraw no more than £200 a month. Further withdrawals will be charged a 2 per cent fee. Exchanging money is free on weekdays, so long as you don’t exchange more than £5,000 a month. Anything over this has a fee of 0.5 per cent.

    Be aware, however, that there is a 1 per cent markup for Thai Baht and Ukrainian Hryvnia, and at weekends there is a 0.5 per cent markup for all major currencies and 2 per cent for Thai Baht and Ukrainian Hryvnia.

    Alternatively, WeSwap’s card allows you to store money in 18 currencies and you can top up at any time through the app or online. Instant currency ‘swaps’ are charged at a rate of 2 per cent of the swap amount, but if you can wait three days, you’ll pay 1.3 per cent and if you wait seven days, you’ll pay 1 per cent. Cash withdrawals over £200 are free, but there’s a fee of £1.50 (or currency equivalent) for smaller amounts. Note that both Revolut and WeSwap both charge around £5 for a replacement card.

    Taking cash? Order in advance

    Taking some foreign currency on your trip can come in handy for taxi fares, restaurant tips and so on. But whatever you do, don’t leave buying your currency until you arrive at the airport as you will pay inflated exchange rates and commissions. Instead, take the time to shop around in advance to make sure you get the best deal.

    Don’t worry if you have left it a bit late, however. You can still save money by pre-ordering your foreign currency for collection at the airport but be aware you will usually need to do this at least four hours in advance.
    Top travel money tips

    When paying with a debit or credit card, always pay in the local currency rather than pounds. If the retailer converts the payment into pounds – known as dynamic currency conversion – the exchange rate will be poor value.

    Be aware that even if your debit or credit card doesn’t charge you a fee for withdrawing cash abroad, you may be charged a fee by the ATM provider.

    Always factor in commission charges when ordering foreign currency.

    Avoid buying currency or loading up a pre-paid card with a credit card as this may be classed as a cash withdrawal and you’ll be charged interest from the day of the withdrawal.