The new Abbey ‘Zero’ credit card gives you six months interest free on new purchases and charges no fees whatsoever, making it ideal for that summer holiday spending spree.
The vast majority of lenders charge a 2.75% foreign transaction fee every time you use your card abroad, which can prove extremely pricey when you consider how many transactions you make on holiday.
So if you are looking for a credit card to take on your summer holidays, make sure you choose one of the three providers that don’t carry this charge: Nationwide, the Post Office and Abbey’s Zero card (the bank’s other cards still have this charge).
Get the longest 0% offer
The problem with the Nationwide and Post Office deals is that you only get three months interest free on purchases, whereas Abbey’s Zero credit card offers six months, making it a far better option.
Interestingly, Abbey has also scrapped the cash advance fee (for withdrawing money from a machine) on this card, while all others in the market will charge you between 2% and 3%.
Certainly the removal of any fee is welcome, but it’s essential you don’t view this as an invitation to draw money on this card as you’ll end up significantly out of pocket – fee or no fee.
Inverse order of payments
Not only do banks charge an unbelievably high rate of interest on such transactions – 25.9% in the case of Abbey Zero – but it’s also the most difficult to pay off.
Why? Because banks and building societies (with the notable exception of Nationwide) structure your repayments in such a way that the portion of debt earning the highest rate of interest is always the last to go, and this is almost always cash advances.
That means you’ll have to clear all balance transfers and store purchases before you can even begin to whittle away that debt. Avoid drawing cash on your credit at all costs.
Great for short term balance transfers
The Zero credit card also comes with a handy fee-free six month balance transfer option, which is great if you’ve got a small amount of debt to clear.
If you’re unsure whether you can pay off the transfer in that time, err on the side of caution and opt for a longer term balance transfer deal with a fee instead.
The Virgin credit card is still the best around, offering 15 months interest free with a 2.98% fee.
Want an even cheaper holiday
As we mentioned at the start, Abbey Zero is really the cheapest credit card for spending while on holiday abroad. But there is an even cheaper way: Avoid going in to debt altogether.
By making just a few simply cutbacks on your monthly household expenditure you could save enough to enjoy your summer sojourn without going into the red at all. Read more about it here.
Comparison table: Which card should you take on holiday?
| Nationwide Classic | Post Office | Abbey Zero |
| APR | 17.9% | 15.9% | 18.9% |
| 0% / New Purchases | 3 Months | 3 Months | 6 Months |
| 0% / Balance Transfer | 10 Months | 10 Months | 6 Months |
| Transfer Fee | 2.5% | 2.75% | N/A |
| Cash Advance APR | 22.9% | 22.48% | 25.9% |
| Cash Advance Fee | 2.5% | 2.5% | N/A |
