This feature turned out to be one of our most popular articles last year. With the summer holidays approaching and many Tricks of the Trade readers heading abroad, it’s time for an updated look at the best card to use abroad.
There have been several key changes in the world of no/low foreign exchange fee cards in the last 12 months. The most significant of which has probably been the demise of the Lloyds Avios Rewards card.
Why you (usually) shouldn’t use your regular debit/credit card abroad
Most UK-issued credit and debit cards will charge you an additional non-sterling transaction fee – often 3% or thereabouts – on top of every foreign currency transaction that you make.
Many cards also carry a hefty fee for withdrawing cash abroad. This is often a fixed charge plus a percentage of the amount you withdraw.
While 3% may seem insignificant, it quickly starts to add up, especially if you’re going to be paying a sizable hotel bill at the end of your stay. Factor in your spending on meals, activities and shopping over the course of the holiday, and this surcharge is actually costing you a fair bit – for no good reason.
Which are the worst offenders – debit or credit cards?
Generally speaking, debit cards seem to dish out the most painful hits when it comes to adding extra charges. This is because they often add an extra fee per transaction in addition to the ~3% non-sterling transaction fee.
A Lloyds debit card, for example, charges £1 per transaction (no matter the size) plus a 2.99% non-sterling transaction fee.
I’d recommend sticking with credit cards when spending abroad – although I’ll explain momentarily how you can still ‘use’ your regular debit card abroad and avoid these extra fees.
What are the best cards to use abroad?
I’ve picked out what I believe are the key cards to consider, let me know in the comments section if there’s a product you’re using that’s worth a look.
Credit cards
Barclaycard Platinum travel credit card
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None
Interest rate: 19.9% on purchases and 27.9% on ATM withdrawals.
Comments: The ‘no fees’ on purchases or cash withdrawals is locked in until the end of the promotional period – 31st August 2022. A strong contender.
This card has a representative APR of 19.9% variable based on an assumed £1,200 credit limit.
Post Office Platinum Credit Card
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: 2.5% with a £3 minimum charge
Interest rates: 18.9% on purchases and 27.9% on cash withdrawals
Comments: A good card for purchases abroad but let down by its ATM withdrawal fees. Avoid if you regularly withdraw cash. Or consider withdrawing a lump sum at the beginning of holiday.
This example is based on a representative APR of 18.9% variable based on an assumed £1,200 credit limit.
Halifax Clarity
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None – although interest charged immediately. See below.
Interest rates: 18.95%
Current promotion: £20 cashback when you apply before 31st August 2018 and make a foreign currency purchase before 30th September 2018. Purchase can be made online or abroad, but it must be a non-sterling purchase. Bonus cashback applied to your account within 90 days of purchase.
Comments: An excellent option, although interest is charged straightaway on ATM withdrawals even if paid off in full by statement date.
Anecdotal evidence suggests there are a couple of ways around this issue:
- Prepay your account into credit before making a withdrawal (I wouldn’t do this too often and risk Halifax’s ire, to be honest).
- Alternatively, after withdrawing, make an immediate bank transfer to your account for the withdrawn amount – you should then avoid the worst of the interest charges.
This example is based on a representative APR of 18.9% variable based on an assumed £1,200 credit limit.
The application page can be found here
Tandem Cashback Credit Card
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None (when withdrawing abroad) – although interest charged immediately.
Interest rates: 18.9%
Benefits: 0.5% cashback on all purchases over £1 worldwide
Comments: Considering this card has no annual fee or foreign transaction fees, 0.5% cashback on purchases is very impressive.
This example is based on a representative APR of 18.9% variable based on an assumed £1,200 credit limit.
The application page can be found here
Debit cards
Curve
Annual fee: Free for the Blue card or £50 for the Black card which comes with a TUMI wallet.
Foreign transaction fee: 1%
Cash withdrawal fee: Flat £2 per withdrawal. (Rate based on wholesale rate + 1%)
Comments: I think the Curve Card is a great option and have had one pretty much since it launched. It works completely differently to any of the other cards mentioned in this article.
Using the Curve app, you can link all of your existing Visa and Mastercard debit and credit cards to your Curve card. You then select which card you’d like to be the underlying card when making purchases with your Curve card.
It also means I can link my regular credit and debit cards and still earn miles and points abroad for just a 1% fee. Saving you the hassle of maintaining a separate card account just for spending abroad.
Read our full review on Curve Card here.
You can apply for a Curve Card by downloading their app via the App Store or Google Play Store (links below).
Get yourself a free £5 of credit by signing up with our referral code: SPACX
Monzo
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None for the first £200/month. 3% thereafter.
Comments: Monzo has evolved considerably from its days as a prepaid travel card with no foreign transaction fees. These days, much like Revolut below, it’s aiming to revolutionize the way you bank. It has retained the ‘no foreign transaction fees’ perk and offers, like Revolut and Curve Card, £200-a-month of fee-free cash withdrawals abroad.
Apply for Monzo by downloading their app here
Revolut
Annual fee: £5 one-off fee to receive a physical card.
Foreign transaction fee: Fee-free for first £5,000 per month, 0.5% thereafter.
Cash withdrawal fee: First £200 each month is fee-free, 2% thereafter.
Comments: This is a very clever app-based banking alternative. It allows you to hold balances in a number of different currencies simultaneously and select, using the app, which one you would like to use to pay for each transaction.
You can load the card via bank transfer/debit/credit card. There are no fees for using any of these methods. The Revolut website explicitly states that top-ups will be treated as a purchase on your credit card, so you don’t have to worry about being stung with any cash advance fees. It also allows you to earn miles and points on top-ups of course…
Apply for Revolut by downloading their app here
Starling Bank
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None
Comments: This is a fully fledged UK current account – run from your phone. You don’t need to use the rest of the current account features though and can simply make use of the accompanying Mastercard Debit card. No charges abroad for spending or cash withdrawals is genuinely impressive and feedback that I’ve read on Starling seems almost entirely positive.
Apply for a Starling Bank account by downloading their app here
The best card for earning points abroad
The above cards are great if you’re conscientious about getting the cheapest rates wherever you go.
But what if you decide it’s too much hassle to have a dedicated card just for spending abroad? Or you’re travelling for work and will be claiming back your expenses. In that case, you’ll just want to know which card will earn you the most rewards when spending abroad.
American Express Preferred Rewards Gold Credit Card
Annual fee: Free first year, £140 thereafter
Foreign transaction fee: 2.99%
Cash withdrawal fee: 3% with a £3 minimum
Interest rates: 22.9% on purchases and 27.9% on cash advances.
Earnings rate: Double points i.e. 2 Membership Rewards points per £1 spent in a foreign currency.
Comments: Membership Rewards points can be converted to Avios, Virgin Flying Club, Etihad Guest miles as well as numerous other travel partners. Along with the HSBC card below it is the best option for earning the miles when spending abroad.
My review of the Amex Gold card is available here.
This card has a representative APR of 57.6% variable based on an assumed £1,200 credit limit.
HSBC Premier World Elite Mastercard
Annual fee: £195
Foreign transaction fee: 2.99%
Cash withdrawal fee: 2.9% with a minimum £3 charge.
Interest rates: 18.9%
Earnings rate: Double points i.e 4 Reward Points per £1 spent on non-sterling transactions. HSBC Reward Points can be converted to Avios, Etihad Guest, Singapore KrisFlyer and Cathay Asia Miles at a 2:1 ratio making the earnings rate abroad effectively 2 Avios per £1.
Comments: Assuming you meet the financial requirements for an HSBC Premier account and are happy paying the fee to use the card generally, this card is a nice little earner.
Our full review of this card is available here.
This card has a representative APR of 59.3% variable based on an assumed £1,200 credit limit and a £195 annual fee.
IHG Rewards Club Premium Credit Card
Annual fee: £99
Foreign transaction fee: 2.99%
Cash withdrawal fee: 3% or £5 whichever is greater
Interest rates: 19.9% for purchases (variable) and 27.9% for cash advances (withdrawals)
Earnings rate: 4 IHG points per £1 spent on non-sterling transactions
Comments: This card is definitely not worth getting purely for spending abroad. The cash withdrawal charges, in particular, are substantial. If you have it anyway, is it worth using just for purchases? That will depend on how highly you value/wish to build up your IHG points balance. Personally, I would say not.
My review of the IHG Premium Card card is here.
This card has a representative APR of 41.5% variable based on an assumed £1,200 credit limit and a £99 annual fee.
Verdict
One thing is clear.
Take 10 minutes to sit down to look at the cards that you spend on abroad. If you’ve just been using your regular debit or credit card – it’s definitely worth exploring the cheaper options out there.
If I had to give a more specific answer, I’d say the best UK credit card to use abroad would be the Barclaycard Platinum travel credit card, given the potential faff surrounding interest on cash withdrawals for the Halifax Clarity card.
If you’re willing to move away from more traditional banking options, Starling Bank deserves a mention for its no foreign transaction fees AND no cash withdrawal fees. Tandem’s generous cashback return is also an attractive option.
Personally, I tend to use my Curve Card for spending abroad (although I do have a Revolut card too). I like Curve’s ability to toggle between multiple cards, still earn miles and points and not have to manage another current or credit card account.
Which card do you use abroad?
Disclaimer: The information provided by Tricks of the Trade is intended solely as a helpful guide to relevant travel rewards card products and their various features and offers. You should always conduct your own research as recommendations provided within may not be suitable for your personal financial circumstances.
Any reasonably low annual cost credit cards out there with free airport lounge access? without additional fees?
Hi Gary,
Hmm. Depends what you might call low cost I suppose. If we use the Amex Platinum card with its £450 annual fee as the benchmark, you could look at cards such as the HSBC Premier World Elite Mastercard and the Santander World Elite card which are both quite a lot cheaper but do have certain income requirements.
Otherwise, a left-field option would be to find a friend/colleague who has an Amex Platinum card/HSBC Premier World Elite card. They could then add you as an additional cardholder for £170/£60 a year respectively. You’d get your own lounge access (your own Priority Pass with the Amex Plat).
Hope that helps – you may want to check out this article for other ideas: https://xexectricksofthetrade.com/2018/10/24/which-uk-credit-cards-offer-free-airport-lounge-access/