The best credit cards to use abroad
Filed under: Credit Cards
Travel Insurance Tips
Fortunately, there are a handful of cards that allow you to use them abroad without charging you rip-off fees. So let's take a closer look. Bear in mind that the exchange rate that each one offers will be different and you might want to take that into consideration when you're comparing.
Travel Insurance Tips
1. Aqua Reward credit card
The Aqua Reward card is actually designed for people with a less than perfect credit rating but is also a very good piece of plastic for taking abroad. There are no foreign currency exchange or transaction fees. What's more, it pays 3% cashback on all your spending, up to a maximum of £100. However, as it a card aimed at people looking to rebuild their credit score, it comes with a very hefty interest rate of 34.9% – so make sure you pay off your balance in full each month.
2. Halifax Clarity and Clarity Rewards credit card
Halifax offers two credit cards that won't charge you a fee for using your card anywhere in the world – Clarity and Clarity Rewards.
Make sure you clear the balance in full each month to avoid being charged interest, which is charged at a representative interest rate of 12.9%.
If you make any cash withdrawals, you won't be charged a fee but you will be charged interest from the date the withdrawal is made – so avoid doing this if at all possible.
The Clarity Rewards card pays you £5 for every month you spend £300 or more, so it's a decent reward card in its own right, regardless of how often you go abroad. However, you need to be a Halifax current account customer to get hold of one. You can apply for one in a branch or on 08457 28 38 48.
3. Post Office Platinum credit card
The Post Office Platinum credit card won't charge you a commission fee for any purchases you make overseas. This is also the case if you make any online transactions from home in a foreign currency.
What's more, for the first three months, any purchases you make will also be interest-free!
However, be warned that after that period you will be charged an interest rate of 16.9%. So make sure you have paid off your balance in full by the time the three months is up and that any purchases you make after that are also paid off in full each month.
If you use your credit card to order currency or travellers cheques with the Post Office, you'll also avoid paying a cash advance or handling fee. However, while this is highlighted as a benefit, you'll be charged interest at 24.10% from the date the money is taken from your account.
4. Saga Platinum credit card
If you're aged 50 or over, the Saga Platinum credit card will also let you side-step foreign currency fees when you use your card for spending overseas. There's also nine months of interest-free spending with this card. Just bear in mind that after this point, you'll be charged interest at 11.9%.
Unlike the majority of credit cards, with the Saga Platinum Credit Card you'll also benefit from 55 days interest-free on cash withdrawals – meaning that if you do take out money from an ATM abroad, you won't be charged interest providing you clear your balance within 55 days.
If you don't clear your balance within this period, the interest rate jumps to a whopping 23.9% and this will be charged from the date you withdraw your money – so don't get caught out! You should also bear in mind there is a 2% fee (minimum £2) for withdrawing cash on your credit card.
5. Nationwide Credit Card and Select credit card
If you're a new customer, the Nationwide Credit Card allows you to build up an allowance for spending overseas every time you make a purchase in sterling. So for every £5 you spend in sterling, you'll be rewarded with £1 to spend overseas.
The allowance you've earned will appear on your statement each month and there's no limit to how much you can build up. What's more, if you don't use your overseas spending allowance in the first year, you can carry it over.
Take a look at the nifty calculator on the Nationwide website to see how your allowance can build up.
If you spend more than your allowance when you're on holiday, you'll be charged a 2% commission fee.
You can also enjoy up to six months interest-free spending. Just make sure you pay off your balance in full before the six months come to an end - otherwise you'll pay an interest rate of 15.9%.
If you're a Nationwide FlexAccount current account customer and you've paid in at least £750 a month for the past three months or you're going to switch to it or have switched to it in the past four months, you are eligible for the Nationwide Select credit card.
This card offers commission-free purchases abroad plus 0.5% cashback on all sterling purchases. It also offers 12 months interest free on purchases.
6. Sainsbury's Gold Credit Card
The Sainsbury's Gold Credit Card is a little different because you have to pay a monthly £5 fee for the privilege of owning it. However, in return, you'll benefit from fee-free cash withdrawals and foreign purchases.
To make the most of this, make sure you clear your balance in full each month – otherwise you will be charged interest (9.94% for purchases and 24.93% for cash advances). Providing you do pay off your credit card in full each month, you won't be charged interest for any purchases or cash withdrawals you have made.
In addition to all that, you'll also get annual worldwide travel insurance for you and your family (two adults up to the age of 65, and up to six children under 16 – or 23 if they're students). And you'll be able to collect Nectar points too!
This could be a very handy card to have if you're a regular traveller and are prepared to pay the £5 monthly fee. However, if you're only planning one holiday this year, it's probably not worth it.
7. Santander Zero credit card
This card has now been withdrawn to new customers but if you still have one, it charges no fees for foreign transactions or cash withdrawals. You'll also be able to enjoy six months interest-free spending (however, the rate jumps to 18.9% after that). Be warned that this credit card will charge you interest at a rate of 27.9% from the minute you withdraw cash.
How they compare to debit cards
Both Norwich & Peterborough Building Society and Metro Bank offer accounts with debit cards that don't charge any fees if you use them abroad. However, the Norwich & Peterborough accounts require you to either fund them or use them each month, even when you're not travelling. Find out more and see how much your bank charges for overseas use in The best debit cards to use abroad.
Prepaid currency cards
Another option is prepaid currency cards. The great thing about these cards is that they allow you to load up your card with funds before you jet off abroad – as well as when you're out there, making it easier (in theory) to stick to a budget.
Certain cards don't charge you for making purchases overseas or making cash withdrawals. And because these cards are prepaid, there's no need to worry about interest rates. What's more, you'll generally get a competitive exchange rate. But they do come with some fees, so read the small print carefully.
There is a wide range of prepaid currency cards on the market, from the likes of the AA, the Post Office, FairFX, Caxton FX, Travelex and My Travel Cash. You can find out more and see a comparison for different destinations in The best prepaid cards for spending abroad.
- The credit cards that offer 0% interest and rewards!
- The Fixer: Overseas card charge shock
- Sneaky credit card tricks for your holidays
- Compare travel insurance quotes