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Overseas holidays are back on the menu with millions of UK travelers planning to get away this summer.
Many have not traveled since the pandemic began two years ago, but with coronavirus restrictions loosening, this year will be the first that some plan to travel abroad.
While the focus will be on traveling to a sunny destination, consumers should also be thinking regarding how they can increase their vacation spending.
This is especially important in the current climate as the cost of living has left households looking to cut costs wherever possible.
As such, tourists should make sure they have the best credit, debit or prepaid card before they leave.
This will mean they can save on non-sterling transaction fees and cash withdrawal fees, as well as even get cash back on their purchases.
Jenny Ross, which one? Money Editor said: “The best cards easily beat the exchange rates offered by exchange offices when you buy currency. But you’ll need to watch out for high fees on foreign transactions and cash withdrawals.
“Debit cards are generally the worst culprits, although there are some no-fee options.
“There is a larger selection of no-fee credit cards designed for use abroad, but to avoid accruing interest, you’ll need to pay your bill in full each month and avoid withdrawing cash.”
IWith the help of Head for Points and Which?, he has compiled a list of the best options.
Credit cards
Below is a list of the best credit cards for spending abroad.
Recompensas Barclaycard: This credit card offers users 0.25 cashback per cant on all transactions, matching the best non-America Express cashback cards on the market, and is completely free to use abroad.
This is a great all-in-one card for anyone who just wants a card to use both at home and on the go and there’s no annual fee.
Rob Burgess, editor of Head for Points, said: “This is a very impressive product and a sign that Barclaycard is starting to get more aggressive once more in the credit card space.”
Virgin Atlantic Reward y Virgin Atlantic Reward+ Mastercard: There are currently no hotel or airline credit cards in the UK that can be used abroad.
This is because card issuers need the fee income from foreign transactions to help pay for the generous rewards.
The closest you’ll get, though, are Virgin Atlantic’s two reward Mastercard cards, which are free to use in the eurozone as long as you withdraw euros, Swedish krona or Romanian lei.
Any other currency will be subject to a non-sterling transaction fee. All withdrawals will also be subject to a cash advance fee if you withdraw cash.
Customers can also earn double points when they use their card for flights on Virgin Atlantic or with Virgin Holidays.
American Express Preferred Rewards Oro: This card offers double Membership Rewards points, equivalent to 2 for 1 pound, on spending abroad.
Users can also earn 20,000 Membership Rewards points when spending £3,000 in the first three months of membership. That’s enough for a £100 Amazon gift card.
Nat West Credit Card: This NatWest credit card offers 0 percent currency exchange cards with low interest rates at 12.9 percent APR.
However, customers will pay a 3 percent fee on ATM withdrawals.
Halifax Clarity: Halifax Clarity does not charge for using the card abroad or for withdrawing cash from an ATM. However, users are charged interest on those withdrawals at an APR rate of 19.9 percent.
direct debit
Currense: This is not a credit card, so there is no impact on your credit report by applying for it.
When you use it abroad, Currensea adds a small 0.5 percent fee and the money is drawn directly from your checking account, regardless of who you bank with.
For people who spend only modest sums outside the UK, it may be preferable to get an additional separate credit card solely for travel. The card itself is free.
Chase Mastercard: There are no spending or ATM fees with the Chase card.
Consumers can also get 1 percent cash back on their everyday debit card spending while on the go.
prepaid travel cards
A prepaid travel card allows consumers to load their chosen currency before leaving. Tourists can use it abroad like any normal debit card.
Pound sterling: Challenger bank prepaid cards offer the most flexibility as you can load your card with pounds and spend in dozens of different currencies.
revolution: This is another of the best prepaid cards for travelers, without commissions for spending abroad.
You can also make five withdrawals per month, or up to £200 per month free of charge, although you will be charged two per cent per withdrawal and a minimum of £1, following this limit.
Other things to consider
If you have an account with a new bank, for example Revolut or Monzo, some will offer you some kind of offer if you use your debit card abroad.
However, some companies have started adding fees to cards that have low rates abroad, which customers should be aware of.
Added Burgess: “Some providers have started adding sneaky fees to their cards that can vary depending on the day of the week, your monthly spending total and/or the currency you are paying in, so you need to be careful small print.
“That said, you’re always better off than using a standard credit card.”
Other things to consider include credit cards that offer additional rewards for spending abroad.
This can make a big dent in the 3 per cent foreign exchange fee and means you may not want to go to the trouble of getting a separate card to use on holiday.
If you don’t plan to pay for your vacation right away, you’re better off using a card that has foreign exchange fees but a low interest rate.
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