Top 5 Credit Cards Abroad
If you are heading overseas in the next few weeks, the kind of credit card you take can make a big difference to the amount you spend when you arrive.
This is because the majority of credit card providers charge fees for use abroad. For example, foreign exchange fees (also known as loading fees or foreign transaction fees) are charged at between 2.75% and 2.99% every time you hand over your plastic to make a purchase.
Also, if you withdraw cash on your credit card from an ATM when you are abroad, you are also likely to be charged an additional 'handling' fee of around 2.75% of the amount withdrawn. Interest on cash withdrawals is typically also higher than on purchase transactions - and will be charged from the minute you make the withdrawal.
The good news is, not every credit card imposes these charges. We take a look at the best five for your overseas holiday needs.
Remember, though: whatever card you take, it is important to note that some independent ATMs or retailers may levy their own usage fee.
The Halifax Clarity card
This card from Halifax doesn't charge any fees at all for overseas use, whether it's over the counter or withdrawing cash from an ATM - and whether you are holidaying in Europe or the rest of the world. However, while cash withdrawals are free, interest will be charged on them even if you do clear your balance every month.
But at 12.9% variable, the representative interest rate for both purchases and cash withdrawals is a lot lower than the 17.32% market average.
Bear in mind however, this APR is only representative. Depending on your own credit score, you may be charged a higher rate of interest, up to 21.9% (variable).
Sainsbury's Gold Credit card
Travellers will also escape all fees when using Sainsbury’s card abroad. The card is also different from most of its rivals because - as well as no fee for withdrawing cash - you will not be charged interest on your cash withdrawal, so long as you repay your statement balance in full.
The Sainsbury's card does come with a £5 monthly fee but in return for this, cardholders benefit from a worldwide annual travel policy covering a family of up to six children. And, unlike many other standard policies, this includes winter sports.
Despite the fact it's a gold card, there's no minimum income requirement on this card and the representative APR is an exceptionally low 9.94% (variable) - though you will need a good credit score to qualify. Sainsbury's shoppers will also receive double Nectar points with the card.
The Post Office Platinum card
The Post Office Platinum card is another candidate that doesn't charge for over-the-counter purchases abroad. And if you buy your travel money through the Post Office, there is no cash advance fee either. Cash withdrawals from overseas ATMs, however, will cost you - at the greater of £3 or 2.5% of the amount withdrawn.
Post Office Platinum cardholders are not charged interest on purchases for the first three months. It's also possible to transfer an existing balance at 0% for the first 14 months (in return for a 2.98% balance transfer fee).
At the end of the respective 0% periods, a slightly higher APR of 16.9% (variable) kicks in but - again - if you clear your balance every month and avoid cash withdrawals, you will pay no interest at all.
To qualify for the Post Office Platinum card, you must be over 18 and earn £15,000 a year. You will not be eligible if you already hold a Post Office credit card or if you have been declined for one in the last six months.
Nationwide Building Society Select card
This card doesn't charge any foreign exchange fees wherever you are in the world. But it does charge cash withdrawal fees of 2.75% (with a minimum £3).
A look beyond these main features reveals a raft of additional pros and cons. The main benefit is that the card offers a 12-month 0% introductory period on purchases, as well as 0% on balance transfers for 20 months (in return for a 3.1% transfer fee). And, even when using the card in the UK, you will receive unlimited cashback of 0.5% on all sterling purchases.
The downside, however, is that you must have a Nationwide FlexAccount to qualify for the card in the first place. This must also be your main account, which means paying in at least £750 a month for a period of no less than three months.
Saga Platinum credit card
Saga’s Platinum credit card is exclusively for applicants aged 50 or over. But if you fall into this bracket, it's definitely worth a look if you are a frequent traveler.
The card charges no foreign exchange fees for use abroad although it does charge cash withdrawal fees of 2% (minimum of £2). You should avoid cash withdrawals altogether with this card though, as they are charged at a whopping 19.6% interest.
However, the card comes with a 0% interest on purchases offer for the first nine months and you won't be charged any interest on cash withdrawals provided you pay your balance off in full during this time.
You will need a good credit history to qualify for the card as well as an annual income of at least £12,000 a year.