Credit cards Updated:
Summer may officially be with us, but the lack of sunshine means it doesn't really feel like it. It's no wonder that so many people are itching to jet off to sunnier climes, and if you're one of them, it's time to get prepared! Sorting out your holiday money should be the first thing on your list, and it's all about packing the right card.
Research shows that a huge number of people turn to credit cards when they're abroad, with UK holidaymakers spending £26.4bn on their cards last year. The figures, from The UK Cards Association, show that UK-issued debit, credit and charge cards were used to make 440 million purchases abroad in 2014 – almost 14 transactions every second – as people took advantage of the benefits of security and ease of using their cards overseas.
Furthermore, while 80% of all card purchases in the UK are made using debit cards, that's not the case for transactions abroad, with 51% of all overseas purchases – some 224 million – being made on credit and charge cards. In terms of value, the amount spent on credit also outstripped spending on debit cards, with £15.8bn being spent on credit and charge cards abroad last year, compared with £10.6bn on debit cards.
This suggests that consumers prefer to use credit cards for more expensive purchases such as hotel bills and car hire, arguably because they're aware of the increased security and lower charges involved in using credit cards abroad. Doing so means you can get far better exchange rates and even additional legal protection, and all without having to exchange currency or carry around wads of cash.
"With UK consumers spending £72 million every day on their cards overseas, it's clear that holidaymakers are making sure they pack their cards when they go abroad," said Richard Koch of The UK Cards Association. "Not only is it a secure, convenient and often cheaper way to pay when on holiday, cards also make it easier to keep track of exactly what you're spending."
So, if you're planning that all-important summer break, make sure to follow in the footsteps of your fellow holidaymakers and pack that credit card – but just make sure you choose the right one. Ideally, you should have a specific travel credit card that you only use abroad, keeping it entirely separate from your everyday card: travel credit cards have far better exchange rates and lower fees for foreign use, and if you make sure to pay off the balance in full when you return from your break, you needn't worry about interest adding up.
Pre-paid travel cards are another great choice for those who would rather not use credit, as this way, there's no risk of spending more than you should. They can be a great way to help you stick to your budget when you're on holiday, and better yet, they come with the same kind of benefits as travel credit cards (low exchange rates, minimal foreign use charges, etc). Check out our best buys to find the travel cards that are right for you, and you can pack the right one before you jet off and enjoy your holidays!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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