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Using your credit and debit cards abroad

Using your credit and debit cards abroad

Category: Credit cards

Updated: 25/04/2017
First Published: 11/06/2008

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 It is now over 6 months old so the content may be out of date.

Using your Credit Card or Debit Card abroad has become more common with travellers cheques becoming rather old fashioned now. But these people need to make sure they are aware of the additional charges they will face for using their credit cards abroad.

Credit Cards

Most credit cards charge a foreign usage charge, some as much as 3% for both purchases and cash transactions. This charge is applied each time the credit card is used and can soon mount up to a significant amount.

Taking cash out on your credit card is never advisable even in the UK, as not only is the interest rate much higher than on purchases but you will be charged the interest from day one. On top of this you will be charged a cash handling fee as well as the foreign usage charge if the cash is taken out abroad.

If you do wish to use a credit card abroad it may be worth considering taking one out just for using abroad. Neither Abbey, the Post Office nor the Nationwide BS charge foreign usage fees.

Debit Cards

Because in the UK we have become accustomed to free banking, many people automatically assume that they will not be charged for using their debit cards abroad. This is not the case and some lenders charge customers for both retail and cash transactions.

Again these charges are charged each time the debit card is used overseas. For every £100 taken out on an Alliance & Leicester card you will be charged £4.95.

Customers taking out cash need to be aware of the minimum charge. If you withdraw lots of small amounts you will be hardest hit. It may be worth planning ahead for your financial requirements for a few days at a time.

Even paying for goods directly with your debit card does not stop you being charged. Most providers charge a retail conversion charge and some charge an additional transaction charge. Spending £100 on your Halifax debit card will see you being charged an additional £4.25.

Nationwide BS is the only provider that does not make any additional charges for using your debit card abroad. Its FlexAccount current account does not require any minimum funding in order to take advantage of this. It may be worth opening an account with Nationwide BS just for use when you are abroad, if you don't want to switch your main current account.

With everyone concentrating on enjoying themselves rather than concentrating on what they are spending, overseas charges can soon mount up. Customers could find their balance much lower than expected when they get home if they are not careful.

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.