The best travel cards for spending abroad

You’ve shopped around and bagged a holiday deal, pre-booked a bargain hire car and have made sure that your luggage meets your airline’s allowance to avoid any extra charges. Don’t now fall at the last hurdle by wasting money when you spend abroad.

If you use your normal debit or credit card while you’re overseas, you could be hit by unexpected charges – and they can soon add up. Many card providers will add on a foreign transaction fee (also known as a ‘non-sterling transaction fee’) of around 3% – that’s an extra £3 for every £100 you spend. You’re often charged to withdraw cash from ATMs too, which can be a fixed percentage of the amount you withdraw or a one-off set fee per withdrawal. Some debit cards even charge a fee every time you use them abroad as well. Always check what your card provider charges before you travel.

The good news is that there are specialist credit and debit cards that have been designed for spending abroad, without overseas spending fees and with competitive exchange rates.

These are some of the current best buys, according to our friends at MoneySavingExpert.

The best travel credit cards

Using a travel credit card to spend abroad comes with various advantages, including interest-free spending (providing you repay in full each month) and strong financial protection (under Section 75 of the Consumer Credit Act if you buy something between £100 and £30,000).

Lloyds Ultra Visa credit card

MoneySavingExpert chooses the Lloyds Ultra Visa credit card as its top credit card and overall best travel card. This is because it doesn’t add on a foreign exchange fee when you spend abroad and offers fee-free cash withdrawals while you’re away. Interest is charged daily on withdrawals until they are fully repaid, though, so it’s best used for spending rather than at ATMs.

The card also pays 1% cashback on almost all purchases worldwide for the first year with 0.25% after – and there’s no cap on how much you can earn.

Barclaycard Rewards Visa Credit Card

The Barclaycard Rewards Visa Credit Card also gets the tick of approval as it offers 0.25% cashback on both spending abroad and within the UK.

Other plus points are the fact that there are fee-free and interest-free withdrawals every month – as long as you pay it off in full every month to avoid any interest.

Virgin Money Travel Credit Card

The Virgin Money Travel Credit Card is another top travel credit card as it offers fee-free spending abroad with 1% cashback on most purchases for three months (maximum of £15 per month), then 0.25% after that.

However, there’s a 5% ATM withdrawal fee plus a daily interest fee until it’s fully repaid, so it’s best used for spending rather than taking money out.

The best travel debit cards

Using a travel debit card can be beneficial in helping you keep track of your spending abroad and avoid accruing interest charges. You’ll still have some financial protection under the chargeback scheme.

First Direct

Customers love First Direct’s service as is shown in polls on websites such as MoneySavingExpert and Fairer Finance. And, for travellers, its debit card offers fee-free spending and cash withdrawals overseas – and you can withdraw up to £500 per day in cash.

If you make a full current account switch, there’s a £175 welcome incentive (with minimum requirements such as adding at least two direct debits or standing orders, putting at least £1,000 in the account and making more than five debit card payments within 45 days of opening your account), and a linked regular saver account offering 7% AER. Eligible customers will receive an interest-free overdraft of £250, too.

Starling

The digital bank Starling tops customer satisfaction surveys along with First Direct, and its debit card offers fee-free spending and withdrawals when you’re abroad. You are limited to withdrawing £300 a day or six withdrawals, though.

The app also has several useful features, including budgeting tools and instant transaction notifications to help you keep track of your spending.

Currensea

Currensea’s* debit card is a little different as you don’t need to open a new bank account to receive it. Instead, you can securely link it to your current account through Open Banking (the banks it links with include Barclays, First Direct, Halifax, HSBC, Santander plus many others).

You can then benefit from fee-free spending abroad and fee-free withdrawals up to £250 a month on its free-of-charge essential plan. Currensea says that its customers save an average of £55 a year compared to using a high street debit card.

Note that there is a 0.5% conversion charge and daily spend and transaction limits depending on your balance.

Marriott Bonvoy members can also benefit from loyalty programme rewards when choosing one of Currensea’s newly launched debit cards in partnership with Marriott.

Are there alternative ways to spend wisely abroad?

If you’d like to set a budget and know what rate you’re going to get in advance, a prepaid travel card could be a good option. With these, you load them in advance with the currency you’re going to use and then you can spend on them as you would with a debit card. As with all spending options, shop around to find the cards with the best rates and low fees.

You may want to take some cash away with you, too. Again, shop around before your trip to get the best exchange rate – MoneySavingExpert’s TravelMoneyMax is a handy tool for this. Always avoid buying cash in the airport without pre-ordering it as you’ll usually pay a premium as you’re a captive customer.

Top tips for spending abroad

• You may be asked if you’d like to pay in pounds or the local currency while you’re away. If you’ve done the hard work shopping around for a top travel card, don’t be tempted to say pounds for ease. This means that the retailer you’re dealing with does the currency conversion rather than your card provider – this is known as dynamic currency conversion – and the rate is likely to be much worse than the one in the local currency.
• Whichever card you choose, make sure you know your fees before you travel to use it in the best way.
• If you take cash with you, check your travel insurance limits cover you for loss or theft of the amount you have.
• If you take out a travel credit card, set up a direct debit to repay what you owe every month, so you don’t undo your savings.
• Do some research on the exchange rate in the destination you’re travelling to so you can quickly work out prices while you’re out and about. It is a good idea to look up what things, such as taxi fares, usually cost to avoid being overcharged.
• Avoid making withdrawals on travel credit cards as you’ll usually pay interest on the amount you withdraw until you pay it off.

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