How to Compare Credit Cards for Use Abroad: part 2
Use Abroad Credit Card Best Buys
Use Abroad Credit Card FAQ's
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Credit cards can really provide a helpful travel companion when abroad - and some cards really offer much more than you would first expect.
However, it's important to make sure you are taking the best credit card with you abroad, so you can avoid many of the hidden fees and charges associated with using a credit card abroad.
Pick the right card, and you could even see yourself saving money and having your bank or building society on hand if anything happens.
What to look for...
- How much is the foreign transaction fee?
When using a credit card abroad, it's important to find out the fee charged for foreign transactions. Most credit cards charged around 2.75% of the transaction amount, however it is possible to find credit cards that charge less than this, and there are even some credit cards don't charge a foreign transaction fee at all.
One of the best credit cards for spending abroad is the Post Office credit card, which has a 0% foreign transaction fee - so they won't charge you a fee for overseas purchases at all.
- What is the standard interest rate?
Unless you plan to repay the balance in full upon your return you should look for a competitive interest rate, on purchases and also cash transactions if you intend to use your credit card for any cash withdrawals.
- Are you going to use your credit card for cash transactions?
If you think you may use your credit card for cash transactions in preparation for your trip or whilst you're abroad, it's important to find out how much you will be charged for these transactions.
Cash transactions include buying foreign currency or traveller's cheques as well as ATM cash withdrawals. It's important to be aware how much your credit card is charging you, as cash transactions are often subject to higher interest rates and handling fees.
If you know you will definitely use your credit card for cash transactions, try and choose a credit card that offers a low interest rate on cash transactions, there are even some credit cards that do not charge a cash handling fee.
- Travel discounts and cardholder services
Some credit cards offer additional benefits for travellers, such as travel insurance policies, purchase securities, emergency card replacement services, and fraud protection, all of which could prove invaluable when you are far away from home.
Taking the right credit card abroad with you can mean you have an arsenal of free services on hand to help you when you need it most. Services like emergency medical and legal assistance and credit card and cash replacements can mean the difference between a serious holiday headache and getting things sorted out quickly and easily if anything goes wrong.
It may also be useful to choose a credit card that offers travel discounts, while you may not want to wait to save up enough points or flyer miles for a free flight, travel discounts can offer a quick money-saving fix when booking your travel from airport parking right the way through to flights, hotels and package holidays.
What to watch out for...
- Cash transactions
Probably the easiest way to slip up and be landed with a tonne of fees and charges is using your credit card to buy foreign currency, traveller's cheques or at an ATM machine abroad.
With staggeringly high interest rates and handling fees on top, as well as the usual foreign transaction fee, withdrawing (or buying) €100 can quickly turn from costing £68 (at a rate of 1.45) to £73 - and that's just the fees - it doesn't include any interest you'll be charged.
This can be avoided though, by far and the best way to pre-buy foreign currency is to withdraw the cash on your debit card at a U.K. ATM machine and then buy the foreign currency in cash before your trip.
However, it's not always feasible to take as much money as you need abroad, and credit cards really ought to be offering the security and convenience to remove the need to carry cash.
If you use the right credit card you can avoid these costing fees and hefty interest charges.
Don't forget!
Repay as much, if not all of your credit card balance as soon as you return from your holiday. You'll save money in interest charges and your holiday spending won't be getting you into debt.
Know the fees and rates charged by your credit card and if you can, take out a credit card that you know is not costing you an arm and a leg to use abroad.
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Compare credit cards for use abroad
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