Credit Card Questions & Answers

What's the best type of credit card to use abroad?
Choosing the right credit card to use abroad is for most people primarily a question of cost. The cheapest cards to use abroad are those that waive any foreign transaction fees as well as offering reduced handling fees and interest rates on cash withdrawals and foreign currency purchases.

Does my credit card cover purchases I make abroad?
A recent ruling by the House of Lords means that cardholders who use their credit cards to make purchases abroad will be protected under Section 75 of the Consumer Credit Act.

This purchase protection offered on all credit cards covers purchases made in the UK as well as purchases made whilst abroad, purchases made abroad by phone, mail order or over the Internet, purchases made from a foreign supplier for delivery into the UK and purchases made from a foreign supplier or agent who is temporarily in the UK.

Why is Dynamic Currency Conversion so bad?
Dynamic currency conversion or DCC is when an overseas credit card payment is converted to the cardholder’s own currency (pounds sterling) by the retailer.

While this may not sound so bad, it is actually far more expensive than paying in the local currency and being charged a conversion – or foreign currency – fee by the credit card issuer.

Where can I withdraw cash abroad?
ATM machines are location around the world – and most accept Visa, MasterCard and American Express.

Look out for the Visa, MasterCard or American Express symbols on the ATM machine – depending on your card you may need to also look for a Plus (Visa), Maestro (MasterCard) or Cirrus (MasterCard) symbol.

To be sure, if you know where you are planning on going you can make use of the ATM locator services on the Visa, MasterCard or American Express websites.

What is a foreign transaction fee?
A foreign transaction fee is an administration charge or ‘handling fee’ that is charged by credit card companies when you use a credit card to buy goods or services in a foreign currency.

Also known as a ‘currency conversion charge’ this fee is intended to cover the cost of converting pounds sterling into the foreign currency to make the payment. The foreign transaction fee is usually 2.75% of the purchase amount, though it can range from 0% to 3% depending on the credit card.