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Watch out for fees when using your card abroad

Watch out for fees when using your card abroad

Category: Travel

Updated: 25/04/2017
First Published: 25/04/2017

The Bank Holiday weekend could be the perfect time for holidaymakers to get away from it all by taking a trip abroad. If you're one of them, you're probably starting to prepare by sorting out your travel money and packing those last-minute essentials, which could well include your debit or credit card in case of emergencies - but just make sure to keep an eye out for fees, and consider packing a travel credit card instead.

Plastic fantastic?

Despite being a convenient payment method when at home, our latest research reveals that debit cards and most credit cards charge for use abroad, sometimes considerably, which is why holidaymakers should consider taking out a more cost-effective card if they expect to use their plastic during a trip.

Indeed, our research shows that some debit cards can charge £9.50 for a £200 cash withdrawal, while credit cards can charge £11.96 for the same transaction, not to mention conversion or usage fees: there is typically a 2.75% to 2.99% conversion fee on the amount you spend on top of a set charge for ATM withdrawals, which can be between £1 and £5 for each transaction, and these can be applied every time the card is used - and that's before interest is taken into account.

These are crazy expenses that can easily eat into your travel budget, but the worst part is that they're wholly unnecessary, particularly when there are fee-free cards specifically designed for use abroad – check out the pick of the bunch below.

Credit Card
Debit Card Prepaid Card (Euros)
Top deals for withdrawing cash abroad Creation Everyday Credit Card MasterCard Nationwide FlexPlus Ice Travellers Cashcard

Be prepared

"Spending money can sometimes be the last thing on the mind when preparing for a trip abroad, but it could be costly to leave organising cash until the last minute," said Rachel Springall, finance expert at Moneyfacts.co.uk. "Not only could consumers miss out on a decent exchange rate, but there is a danger of not taking enough to cover expenses, or even worse, losing it. That's why many resort to a debit or credit card when funds dry up.

"While consumers get protection from theft when using the plastic abroad, some debit and credit cards will charge eye-watering fees each time you withdraw cash, so convenience costs. Holidaymakers would be wise to avoid these pricy withdrawal fees and instead consider a much more cost-effective card, particularly if they are frequent travellers."

Some of the best travel credit cards we've found for fee-free foreign use come from Creation Financial Services and Halifax, both of which have credit cards that charge absolutely no fees when used overseas, so could be ideal choices for those who are happy with using credit.

Alternatively, those who would prefer to use a debit card can still dodge fees by taking out (or switching to) a new current account: Nationwide's FlexPlus account comes with a debit card that allows free cash withdrawals worldwide, while Metro Bank's current account debit card is free to use when taking out cash in Europe.

But what if you want to be truly budget-conscious with your holiday spending? Well, that's where prepaid travel cards can come in.

"Consumers hoping to budget their expenses could choose a prepaid card, as it works like a bank account in the sense that you can only spend what's loaded onto it," said Rachel. "Not only that, but if the card is lost, it can be replaced without any loss of money.

"There are even prepaid cards that do not charge for ATM cash withdrawals, such as the Ice Travellers Cashcard, ideal if shoppers find themselves in a store that doesn't take card payments. The card comes with a small £4.75 issue fee for lower loadings, but it can pay 1.5% cashback on £50 spends, so it might be handy to pack a prepaid card for your next holiday."

What next?

Compare the best credit cards for travel

Check out the top prepaid travel cards

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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