Foreign travel can be a great way to leave all your cares behind you, especially if you take the trouble to plan your holiday spending in advance.
But there is nothing worse than coming home to a wet and windy Heathrow Airport and a big credit card bill that’s packed with extra charges and commissions you weren’t expecting.
So, if you plan to use a credit card abroad, make sure you take advantage of the convenience of your card without falling foul of the small print money-traps the credit card companies have left for you.
The first step is to consider whether you need to use your credit card abroad at all. Can you survive with travellers’ cheques or foreign currency? If you are going for more than a weekend then taking your money in cash is too risky, particularly for those big family holidays.
If you aren’t keen on travellers’ cheques either then you might find a prepaid card is useful. These are cards that you preload with cash. You can then use them to withdraw money from ATMs or to buy goods.
A prepaid card can be very expensive to use but some offer better value if used sensibly. See our prepaid card guide for more details. If you simply must use a credit card abroad then we recommend that you apply for a new credit card especially for foreign travel and that you only use it when absolutely necessary.
The cards we recommend are the Post Office credit card and the Nationwide credit card. Both of these cards do not make you pay foreign transaction commission when you make a purchase abroad – normally credit cards charge up to 3% for each purchase you make while out of the country.
This makes the Post Office credit card and the Nationwide credit card the best travel money credit cards around for foreign purchases, although both cards will charge you their full rates of interest on cash advances from the transaction date to when you pay the balance off in full. This is 24.10% p.a. for the Post Office credit card and 27.9% for the Nationwide credit card.
NB: We recommend that you never use a credit card to withdraw cash from an ATM either in the UK or abroad as these withdrawals are considered to be cash advances and attract a high credit card interest rate plus a credit card charge plus you may well pay interest on the transactions whether you pay your credit card balance off during the interest-free period or not. Different credit card companies have differing policies on this.
