Whether you're a frequent traveller, or just prefer to use your credit/debit card whilst on your annual holiday abroad (in favour of carrying wads of cash about), there are a range of traveller-friendly options available to you. At the heart of what makes a card traveller-friendly is that it will not make an additional charge for purchases made abroad (sometimes called a "Foreign Usage Loading"). Some may not charge you extra for withdrawing cash either – although with exorbitant interest rates, you should not withdraw cash on a credit card if you can avoid it! When selecting a card for overseas use, it's also worth bearing in mind that the two major payment networks, MasterCard and Visa, may be more widely accepted in certain areas than others. Traditionally it's the case that MasterCard is accepted widely in Europe, with Visa being more acceptable worldwide. So in order to increase your options, it's a good idea to carry both a Visa and a MasterCard – particularly if you're travelling further afield than Europe.
Here's a selection of some of the top Best Buy foreign usage cards on moneyfacts.co.uk:
At present these are probably the best traveller-friendly credit cards out there. In addition to the range of traveller-friendly features being offered, the standard and platinum cards (the difference between the two cards is they have different minimum income requirements: the classic requires at least £8K, the platinum at least £15K) have the added bonus of 0% on balance transfers for 12 months, with a further 0% for up to 5 months on balances transferred on the 2nd and 3rd anniversary of you taking the card out.
Although the Post Office credit cards currently top our Standard Foreign Usage and Gold & Platinum Foreign Usage Best Buys, because they are MasterCards, you may not find them as widely accepted outside of Europe.
One of our top balance transfer card Best Buys is pretty handy for foreign usage too! The Nationwide BS Credit Card Balance Transfer Visa offers 17 months' interest free on transferred balances – a deal that is second only to the Barclaycard Platinum with Balance Transfer Visa as the top 0% balance transfer card available. Such a good balance transfer offer may mask the fact that this card is also good for travellers. Nationwide BS are offering FREE foreign usage charges until 31 July 2011 – making this card a serious option if you're planning to go away before this date. After this you will be charged a foreign usage fee (currently 2%), unless you spend on the credit card in sterling throughout the year. Uniquely, for every £5 spent in sterling on your Nationwide BS credit card, you will receive £1 commission FREE on purchases made abroad. So if you put your grocery shopping on the card throughout the year for instance, and cleared your credit card balance at the end of every month, you wouldn't be charged interest on your purchases (as you get a 56 day period to pay before interest is charged), but you could end up paying less (or no) commission, when it comes to using the card on your summer holiday. However, the big downside, when compared to the Post Office Classic and Platinum MasterCards is that (after the initial period) you don't get free foreign usage, you have to earn it.
For the more mature traveller…
An alternative for the more mature traveller to the Nationwide BS Credit Card Balance Transfer Visa, is the Saga Over 50's Platinum Visa. Offering a respectable 0% on balance transfers and purchases for nine months, Saga charges no foreign usage fees. In addition, you can get access to discounts between 10% and 30% at selected Saga Holiday Resorts as well as other discounts including 5% off a range of purchases made on board one of Saga's cruise ships.
A credit card isn't the only card you can spend on abroad; there are also some current accounts that make no foreign usage charges for overseas purchases.
Santander's flagship fee-free Zero current account offering for existing customers. Santander's Zero Current Account is available to those of us already having £10K in savings or who already hold a mortgage or investment with the Spanish giant. As the name suggests, the big draw with this account is that it has no fees – and that means no commission charges for withdrawing cash or making a purchase abroad using the Visa debit card provided with the account. If you're an existing Santander customer (but not a current account customer) and you switch your current account online, you'll also benefit from Santander's £100 switching incentive when you move your current account across as well!
A real option for frequent travellers who like to manage their finances online. Norwich & Peterborough BS may not be the provider you first think of when it comes to current accounts. However, the Gold Classic Current Account doesn't require you to be an existing customer of the building society, and only requires minimum monthly funding of £500. For travelling, the Visa debit card charges no extra fees for foreign usage. "Great" you might be thinking, "but I haven't got an N&P branch on my local high street". Now obviously if you like to have a branch nearby to manage your current account, then, depending on your location, this account may not be suitable. However, if you like to manage your finances online N&P offers full internet banking services. They also promise to switch all your direct debits and standing orders across to your new Gold Classic Current Account within 10 working days, and if they don't they'll give you £50 cashback!
The "third way" if you like to pay by card abroad, a prepaid card is great if you'd rather not risk taking a credit or debit card away, or if you'd prefer to stick to a budget. Prepaid cards work by you loading the card with credit before you go (or even online while you are away), in much the same way as a pay as you go mobile phone. You can then spend up to the credit you've put onto the card and no further – great if you need to be strict on your budget or don't fancy taking a new credit card or switching current account, purely for the travel friendly offers. One downside to prepaid cards is that they may not be available in the currency of the country you are travelling to (as opposed to a credit or debit card which has no such restriction), so be sure to take this into consideration when choosing your card.
The Virgin Money Travel Prepaid card can be loaded with either Euros or US Dollars.
Your card is protected against fraudulent use and Virgin Money make no foreign usage fee when you spend using the card.
Although, if you withdraw cash at an ATM there is a fee of $2/€1.50.
The Escape Travel Money Card offers free worldwide ATM withdrawals, and
No charges on purchases. Available in US Dollars or Euros
It's free to top-up at Phones4u stores.
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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