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THE best type of credit card to use abroad is simply one that charges lower fees for foreign usage, or better one that waives foreign transaction fees altogether.
It’s also worth considering the cost of withdrawing cash on the credit card or buying foreign currency. These ‘cash’ transactions when made abroad will carry the foreign transaction fee, if charged, as well as the standard cash withdrawal fee and interest rate.
In order to ensure that you do not get charged over the odds for using a credit card abroad – which can be very expensive if you end up with the wrong card – you should look for a card that:
- Does not charge foreign transaction fees when you spend on the card.
- Offers low rates and charges for withdrawals and foreign currency purchases.
- Offers travel insurance cover in case of emergencies.
- Offers insurance cover for purchases made worldwide.
The cheapest option
Currently, the Post Office waives any foreign transaction fee on both its classic and platinum credit cards.
Though as with all credit cards, there will still be a charge for cash withdrawals and a higher rate of interest on transactions such as ATM withdrawals and foreign currency purchase. Where possible, it’s usually cheapest to withdraw cash or buy foreign money with a debit card, especially considering cash transactions usually fall outside of any ‘interest free period’ offered if you repay the balance in full.
See the current best credit cards for use abroad ordered by the fee charged for foreign usage.
Worldwide protection
Many credit cards come with free insurances such as travel accident insurance policies – though these really aren’t a substitute for a full travel insurance policy.
There are some credit cards that do offer full travel insurance, such as Barclaycard but only when you book your travel through the Barclaycard Travel Service.
Citi credit cards offer purchase protection insurance that will cover any goods bought worldwide against theft, accidental damage and fire for up to 30 days from purchase.
Certain credit cards, such as many American Express cards, Barclaycards, Natwest, RBS and Citi credit cards come with a service often termed ‘emergency assistance abroad’. These services can offer medical and legal help abroad in emergencies, as well as offering cash and card replacement services.
See the credit card best buys for travel services.
For frequent travellers looking for something extra
If you travel a lot it may be worth considering a specific credit card for overseas travel. While these cards do carry a premium annual charge, anyone travelling a lot should save money in the long run from the benefits on offer.
The Goldfish issued i24 Card is a premium travel market credit card, with an annual fee £275 it’s not for the faint hearted, but it really does make up for this by offering such benefits as free comprehensive annual travel insurance, priority pass and a dedicated concierge service, as well as waiving any foreign usage fees and offering 1% cash back on all spending.
Finding the right credit card to use abroad
When you are travelling abroad, whether on business or pleasure, the last thing you want is the burden of carrying cash around. Of course, there are traveller's cheques, but these can prove troublesome to use, and in many places they may not be accepted as payment, which means you have to exchange them and this could cost you commission fees.
Having a credit card, on the other hand, can prove very useful, as you know that it will be accepted by most places, you can use it to make cash withdrawals as and when necessary, and you won't have to worry about carrying cash or traveller's cheques around with you.
There are many different credit cards to choose from if you are looking for a suitable card to take abroad, but you need to bear in mind that the cost of using a card abroad can be very high, with a variety of charges and fees applied by credit card providers. It is therefore important to browse and compare different cards to get one that will suit your needs and will save you money.
In order to avoid too many costly charges you should look for a credit card that does not charge foreign transaction fees when you spend on the card, and does not charge over the odds for cash withdrawals. The charges and fees can vary from one provider to another, so by comparing cards you could make a big difference to the amount that you end up paying for the privilege of using your card abroad.
In addition to this you could save yourself some money by finding a card that offers travel services such as emergency assistance and travel insurance cover. Make sure that you take all useful contact numbers with you so that you know exactly who to contact in the event of an emergency. Also, look for a card that offers insurance cover on purchases made abroad, so that you know any goods that you buy are covered.
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