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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: 17/05/2016
First Published: 16/05/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Are you jetting off on a much-needed holiday soon? Then you're probably starting to prepare by sorting out your travel money and packing last-minute essentials, which could well include your debit or credit card – but just make sure to keep an eye out for fees.

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. It can all add up to a high but wholly unnecessary expense – particularly when there are fee-free cards specifically designed for use abroad.

Be prepared

"Planning what to take on holiday can be tricky, but in case of emergency, it may be a good idea to take some form of card with you as well as travel money," said Rachel Springall, finance expert at Moneyfacts. "Cash isn't always king because there is a danger of not taking enough to cover expenses, or even worse, losing it.

"Using a debit or credit card when abroad means you can benefit from extra protection from theft, but the sometimes excessive charges incurred when using these payment methods abroad can lead to a costly headache.

"However, if holidaymakers plan ahead, they could get a more cost-effective card to cover additional expenses. For instance, MBNA, Creation Financial Services and Halifax all offer credit cards that charge absolutely no fees when used overseas, while those who would prefer to use a debit card can still dodge fees by taking out (or switching to) a new current account that offers fee-free debit cards for foreign use."

One of the best credit cards we've found for fee-free foreign use is MBNA's Everyday Plus Amex, while in terms of current accounts, Norwich & Peterborough Building Society's Gold Account offers a debit card with no fees for use overseas, which could be perfect for those who regularly travel.

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

"Pre-paid cards are another viable option for people who want to budget their spending on holiday or avoid taking cash," explained Rachel. "Consumers can load their spending allowance onto the card and feel safe in the knowledge that if they lose their card, it can be replaced without any loss of money.

"There are even pre-paid cards that do not charge for ATM cash withdrawals, which is perfect for paying for goods in stores that do not accept card payments. Bearing this all in mind, it may be useful to add a pre-paid card to the packing list."

What next?

Compare the top travel credit cards

Check out the best pre-paid 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.