Using most credit cards abroad means a nasty shock when you open your bill.A relatively new card from the
Post office won’thit you with extra charges and fees when you take it away. Welcome the UK’s second top-of-wallet choice for your holidays.
I have used the
Nationwide Building Society’s credit card for years on my hols because unlike other cards it does not whack an extra 2.75% onto every purchase abroad. Other cards justify this charge because of the ’extra cost’ of processing transactions - this is just spin.
Most transactions are computerisedincluding the currency conversions, soI am amazed so many people put up with this 2.75% tax on their spending.If you dared to add up all that you have spent on your hols over the past few years on your card you would probably feel pretty miffed at what that extra charge has cost you.
Learn more about the Nationwide card hereConvert your credit card spends into a loanSo I am delighted that a second card company has chosen to axe this charge. It’s a surprising name: the Post Office. But the PO has launched a set of financial services products that are not bad value and is clearly determined to grab a sizeable share of the market.
The PO credit card already offers a wheeze that can cut the cost of credit. It offers a 6-month 0% introductory period (as many other cards do), but at the end of this period you do not have to move onto paying a typical credit card rate of over 12%. Instead you can convert the balance you have built up on the card to a personal loan at a rate of 6.8%.
Check out the Post office card hereBetter a low rate loan than a high rate cardNow I do not recommend that you do this - ideally you should be able to pay off the balance you build up on any 0% offer when it ends. And your objective at that point, if you can’t afford to pay it all off, should be to pay it off as fast as you can. But if, being realistic, you know it will take you a year or more to pay it off, then it’s far better to do so while paying 6.8% than it is paying a typical credit card interest rate of 15%.
Now the Post Office card also offers no extra charge on purchases abroad, which should encourage more people to use it. I don’t use my Nationwide card for UK purchases - instead I use a card that gives me reward points. If that makes sense for you, consider getting either the Post Office or the Nationwide card to use on all purchases outside the UK.
