#cheapest credit card
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Cards can be the cheapest way to pay for things and get cash from machines abroad but only if you use the right one. Your usual card might have expensive overseas fees, so you could save a lot by getting a special ‘travel-friendly’ credit, debit or prepaid card before you go.
Overseas card fees and charges – what you might pay
It pays to check
Check the cost of using your credit or debit card overseas. Some cards are designed for travellers – others could give you a nasty surprise.
Your bank can hit you with four main types of fee when you go abroad.
- Foreign usage fee. When you spend money abroad by card, at the end of the day the amount you have spent is converted from the local currency to pounds using the day’s exchange rate. Most standard credit or debit cards make this slightly worse for you by adding a ‘load’ of up to 3% (so £100 overseas would cost you £103).
- Cash withdrawal fees. Most debit cards charge you for using a cash machine overseas. They’ll typically deduct 2.75%-3% of what you take out. So £100 cash would cost you £103, or £106 if you consider the foreign usage fee too.
- Credit card interest. Usually with a credit card, you only pay interest if you don’t pay off the bill in full at the end of the month – but when you spend overseas some cards will always charge you interest. Don’t withdraw cash using your credit card. You will be charged interest straight away, on top of all the other fees.
- Flat fees. On top of all the rest, some cards charge a fee of around £2 every single time you use them.
Imagine using a credit card to take out £100 at the cash machine. With the worst kind of card you might pay:
- £3 extra for the exchange rate load
- £3 for the cash withdrawal fee
- £1 interest before you pay off your bill
- £2 in flat fees just for using the card
… a total of £9 in fees, just for getting out a little cash.
And remember, you get hit with these charges every time you use your card.
With the best kind of card you’d barely pay anything – some don’t even apply a ‘load’.
How to choose the best card for your trip
There are lots of cards to choose from, but there’s no need to go through the details – that’s all been done for you. Several comparison sites cover cards for use overseas, and you can get expert recommendations from both Which? and MoneySavingExpert.com.
Find the right card for you: