Best cards for overseas spending
Finding a cost efficient way to spend while overseas can help you keep your travel costs down.
A handful of cards have either no or low fees for spending and withdrawals abroad, making them one of the cheapest ways to get dollars, euros or whatever else you need when you're out of the country.
The cards you’ll find on this page will give you a better rate than you’ll get at the vast majority of bureaux de changes, not to mention the security benefits plastic has over cash.
Remember many cards charge extortionate rates of interest or per-transaction charges on spending outside the UK, so finding the right card is key.
When you're away, if you're given the choice to spend in pounds or the local currency always pick the local currency. If you don’t, you’ll pay the expensive local exchange rate set by the retailer, which is a sneaky way to hike the price you’ll pay.
Best credit cards for spending abroad
It's often sensible to pay for purchases when you're abroad by credit card – if anything untoward does happen you will usually be covered by your provider for purchases over £100.
The Halifax Clarity card remains a firm favourite with travellers as there are no fees to use it for purchases or cash advances worldwide. But be aware that you will pay interest at a rate of 18.9% APR on any cash withdrawals from the date of transaction.
This card is marketed for those heading overseas often so there are no promotional 0% balance transfers or 0% purchase deals available.
Creation Everyday Card
No fees on worldwide spending, representative 12.9% APR variable.
This card from Creation Financial Services has no fees on international spending anywhere in the world. If you withdraw cash using this card abroad you'll be charged interest from the day of the transaction at 12.9%.
Best debit cards for overseas travel
If you're unable or unwilling to take out a credit card then these debit cards are a good option for travel abroad.
Metro Bank current account
No fees on European spending or cash withdrawals.
Metro Bank's current account is free to use for purchases and cash withdrawals in 33 European countries. However, if you go any further afield you'll pay transaction fees of 2.5% on any debit card purchases, and 2.5% (plus a £1.50 fee) for any cash withdrawals.
You'll have to sign up for an account in branch, which are mainly located in London and the South East.
Virgin Money Essential account
No fees on worldwide spending.
If you don't live in London and the South East - or are travelling outside Europe - then the Virgin Money Essential current account is our top pick. This has no charges on debit card spending anywhere in the world.
But be careful when using a cash machine abroad as you'll be charged a flat £1.50 fee for each withdrawal you make. This account must be opened in branch but Virgin Money is located in most major towns and cities in the UK.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.