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Best credit cards to use abroad

By  , last updated

A credit card can be an easy and convenient option to use when you’re abroad, whether you want a meal in Milan or a hotel in Hawaii.

Here we take you through the benefits, what to avoid and how to find the right card, as well as some alternatives to a using a credit card.

Easy, secure and greater protection than cash

A credit card can be a very useful thing to have in your purse or wallet while you’re away. It can be handy for spending – and if it is lost or stolen, you can cancel the card immediately and organise a replacement.

Protection is also provided on your purchases. If you spend more than £100 but less than £30,000 on your credit card and something goes wrong or isn’t as described then you can apply to your lender for a full refund. 

However, there are a few traps to be wary of when using a credit card abroad.

Watch out for fees

With most cards, you’ll be charged a fee every time you use your card while you’re abroad.
Confusingly, this fee can be labelled in different ways by different card issuers, including foreign purchase, conversion or exchange rate fee, as well as a loading fee.

Some cards will charge you up to 3% every time you use them in shops, restaurants or anywhere to make a purchase. So, for example, if you stay in a hotel and the bill comes to the equivalent of £300, the card company could add £9.

The cards designed for foreign usage do not charge – compare a variety of credit cards before applying and check the terms and conditions for details on fees on overseas spending.

Don’t get charged for withdrawing cash

If you’re getting money out while you’re on holiday then it’s best to use a specialist credit or debit card to minimise any fees as some cards will charge on average 2.5% of the value every time you withdraw cash. In other words, withdraw £100 and the transaction will cost £2.50.

Remember, you’ll need to pay off the balance IN FULL before the end of the month, or you’ll pay interest.

If you take money out of an ATM using a normal credit card, you’ll start racking up interest immediately, from the point of withdrawal. There is no interest free grace period as with conventional purchases.

Avoid buying travel money with your credit card

Credit card firms see buying currency as taking out cash so you may get charged a cash withdrawal fee, or even a fee for using a credit card by the money changer.

If you’re buying currency always use a debit card (you’ll usually need to bring ID too), or withdraw cash.

Never pay in sterling

When you’re using your card abroad you will be asked if you want the transaction to be in pounds or the local currency.

If you’re buying currency always use a debit card (you’ll usually need to bring ID too) or withdraw cash.

As a general rule, never pay in pounds as you could be charged by the bank/store for doing the conversion.

Finding the right credit card

Smart Search allows you to find out the likelihood of your being accepted for a credit card when comparing your options. Importantly, it doesn’t leave a footprint on your credit file.

Smart Search can also provide ‘pre-approval’ on certain credit cards. This means you’re guaranteed to be accepted for the card you have applied for, providing you pass additional identity and fraud checks.

Alternatives for spending abroad 

Prepaid currency cards: Top up the card with your chosen currency and then spend money when you’re abroad. These are a good option if you have a poor credit score and can’t get one of the top credit cards for overseas spending.

Watch out for fees, though, as some firms will charge you for topping up, spending and withdrawing cash.

Debit cards: While most debit cards will sting you for overseas spending there are a couple that don’t charge any fees for withdrawing cash.

Getting cash before you go: Our travel money and foreign currency comparison page can help you find the most competitive exchange rates on the market. 

Where to next?

What is credit card protection?

Advantages and disadvantages of credit cards

How to get accepted for a credit card

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