Most but not all UK credit and debit cards will charge you an additional fee – often 3% or thereabouts – when you use your card abroad.
Many also impose a hefty fee for withdrawing cash abroad. This is often a fixed charge plus a percentage of the amount you withdraw.
While 3% may sound small, it quickly adds up, especially if you have a sizeable hotel bill to pay. Factor in restaurants, activities and shopping over the course of the holiday and this surcharge is actually costing you a fair bit – for no good reason.
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 £0.50 per transaction (no matter the size) plus a 2.99% non-sterling transaction fee. Cash withdrawals cost £1.50 per withdrawal + a 2.99% fee.
I’d recommend sticking with credit cards when spending abroad – although there are ways to ‘use’ your regular debit card abroad and avoid these extra fees.
What are the best cards to use abroad?
I’ve picked out various key cards to consider, let me know in the comments section if there’s a card you use that’s worth a look.
Credit cards
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
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 29th August 2019 and make a purchase within 90 days of opening the account. Bonus cashback applied to your account within 90 days of purchase.
Comments: An excellent option if you fancy something slightly more traditional than the Tandem card above. Watch out for interest being charged immediately 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 19.9% variable and a 19.95% variable annual purchase rate with an assumed £1,200 credit limit.
The application page can be found here
Debit cards
Curve
Annual fee: Free for the Blue card, £9.99 a month for the Black card or £14.99 per month for Curve Metal.
Foreign transaction fee: None
Cash withdrawal fee: Depending on the type of Curve Card you select, your first £200/£400/£600 per rolling 30-day period is free. The higher of 2%/£2 is charged thereafter.
Comments: I think the Curve Card is a great option and it tends to be my go-to card when spending abroad. 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.
I can link my regular credit and debit cards to Curve and still earn miles and points abroad at no extra cost. It also avoids 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.
Get a free £5 of Curve Cash credit by using our referral code SPACX during the sign-up process.
Monzo
Annual fee: None
Foreign transaction fee: None
Cash withdrawal fee: None for the first £200 a 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. Revolut Premium and Metal accounts have a higher fee-free ATM limit as well as unlimited fee-free foreign transactions.
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…
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 get about Starling always seems positive.
Apply for a Starling Bank account by downloading their app here
The best cards 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 travelling for work and will be claiming back your expenses. In that case, you’ll want the card that 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 Amex 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 here.
This card has a representative APR of 57.6% variable based on an assumed £1,200 credit limit.
The Amex Gold application page is here
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 HSBC 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 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 and who’s paying the bill.
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
Take 10 minutes to look at the cards that you spend on abroad. If you’ve been using your regular debit or credit card, there are almost certainly cheaper options out there.
If I had to give a specific answer, I’d say the best UK credit card to use abroad would be the Tandem credit card, with its generous cashback return also impressive. The Halifax Clarity card is just behind.
If you’re happy to move away from more traditional banking options, Starling Bank deserves a mention for no foreign transaction fees AND no cash withdrawal fees.
Personally, I 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, while earning ‘regular’ 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.