The best cards for spending money abroad revealed – and the ones to avoid which could cost you more
TAKE the wrong type of plastic on holiday and you will pay a high price.
A Sun Money investigation has found that with the worst bank cards you could end up paying £80 in fees when withdrawing £1,000 from foreign cashpoints.
Andrew Hagger of financial website MoneyComms says: “You can also be stung by charges when using the wrong cards in shops or by pressing the wrong button on the card machine.
“These extra costs can quickly wipe out the cash you’ve saved up to enjoy your trip.”
So if you’re planning a summer getaway abroad, now’s the time to apply for the best cards to avoid getting burnt.
Here, we look at the options.
HOW DO FEES WORK? When you use your credit and debit cards abroad, banks can hit you with several charges.
For purchases from a shop, your bank will probably impose a “non-sterling transaction fee”, usually around three per cent.
It will also typically charge for withdrawing cash, which can be as much as 7.99 per cent.
The cash machine provider may also add its own levies.
Among the worst credit cards are MBNA’s, some of which charge 2.95 per cent on a purchase — so if you spent £100 shopping, you would pay £2.95 in extra fees.
Use them to withdraw the foreign currency equivalent of £100 from a cash machine and you would pay an extra 7.95 per cent, or nearly £8 in fees, which could buy three beers in Spain.
Over a week’s holiday if you made £1,000 in withdrawals, that would be almost £80.
Santander credit cards are worse for smaller cash withdrawals as they have a £3 charge.
Take out just £10 and you would pay the equivalent of 30 per cent in fees.
Debit card fees can also be harsh. TSB’s card could land you with a 2.99 per cent fee on cash withdrawals — that’s £2.99 on top of £100.
It charges a similar amount to use your card in shops and restaurants in Europe. In the US or other countries outside the European Economic Area, the charges are even higher.
TSB and MBNA say they each offer cards that are more travel-friendly: MBNA’s Platinum Visa and TSB’s Spend and Save Plus.
BEST CREDIT CARDS: You don’t have to put up with rip-off charges.
There are credit cards that offer fee-free spending abroad. These are best used for making purchases in shops and restaurants.
It’s generally not a good idea to use credit cards to withdraw cash at home or abroad as it can damage your credit score if done too often.
The Barclaycard Rewards card doesn’t charge fees on spending or ATM withdrawals abroad.
There’s also no interest on any cash withdrawn, as long as you pay it back when your next bill is due — but ATM providers could still slap on a fee.
The Halifax Clarity has no charges on overseas spending or withdrawing cash, but you will get charged interest of about 5p for every £100 withdrawn per day from the moment you take money out, so pay it off straight away.
Thuva Amuthan, 32, from Birmingham, uses a Halifax Clarity card when he goes away.
The doctor, who runs cosmetic clinic drderme.com, said: “I always pay it off every month to avoid being charged interest.
“I like to pay for things using a credit card as it gives you extra protection on any purchases.
“When I’m in Europe, restaurants and shops try to charge me in pounds, but I always insist on paying in the local currency as you get a much better rate.”
BEST DEBIT CARDS: The best travel debit cards have no spending or ATM fees overseas, so you can use them as if you’re shopping at home.
It may mean opening a new bank account, but you can do this alongside your main one and transfer money across.
Chase Bank is fee-free for spending and cash withdrawals abroad and gives you one per cent cashback on all your spending, paying up to £15 a month for the first year.
Abigail Barnes, 43, from Wembley, North London, uses her Monzo card abroad, which has no purchase fees.
The time management consultant, who runs successbydesigntraining.com, says: “I just transfer my holiday budget across and then I know how much I’ve got to spend while I’m away.
“II took it on holiday to France last week and used it to pay for everything.
“I don’t have to worry about ordering currency before I go.”
BEST PREPAID CARDS: Prepaid cards can be loaded with a set amount of currency, a bit like a gift card for holiday money.
You can use them for spending or withdrawing cash.
You can either load them with a foreign currency at home or with Pounds and the exchange rates are calculated when you spend on the cards abroad.
But be aware that providers may add between one per cent and 2.5 per cent to the exchange rate.
A card from Revolut via its Standard plan has no fees for purchases abroad and offers free ATM withdrawals of up to £200 per month.
Currensea offers a card that links up with your existing current account — but it’s not prepaid, so you don’t need to load it with currency before you set off.
The FX fees are 0.5 per cent on purchases and withdrawals, and no additional charges for the first £500 withdrawn each month.
Anything above is subject to a two per cent fee.
Fair FX’s multi-currency card is a decent option with no exchange rate mark-up — but there is a fixed £1 fee on all ATM withdrawals.
Make-up artist Joyce Connor, 59, from Reading, said she wouldn’t be without her Revolut card.
The grandma, who last year visited Norway, Egypt and Vietnam, loads her account with British Pounds then swaps them for different currencies, using the Revolut app.
To get the best rates, she sets alerts to buy currency when it reaches a certain price.
She said: “If I have money left over I either leave it in the account, or I can swap it for something else.
“I’ve used it all over the world with no problems.”
CASH: If you prefer cash to cards, exchange at home before you go. Kiosks in tourist hotspots tend to offer terrible rates.
Moneysavingexpert.com’s TravelMoneyMax tool helps find the cheapest place to buy it.
Never buy at the airport unless you’ve ordered it in advance.
And don’t buy currency with a credit card as it counts as a cash withdrawal, meaning you might be charged fees and a higher rate of interest.