New Which? research has discovered that the best value cards for overseas use could save you around £40 on holiday spend of €500.
Which? compared the cost and exchange rates offered by credit card, debit card and prepaid card providers to work out which cards offered the best value for holiday makers. The Metro Bank debit card, Norwich and Peterborough Gold Account debit card and Halifax Clarity credit card all topped our table.
In each scenario, we compared the cost in pounds for five purchases and cash withdrawals of €50 over 22 separate days.
The best debit cards for spending abroad
Debit cards offered on standard current accounts from Metro Bank and Norwich and Peterborough BS offered the best overall options, costing on average £416 and £418 respectively in our €500 scenario.
Both cards add no foreign exchange mark up on the exchange rate offered or any additional overseas charges on purchases or cash withdrawals. The only drawback with Metro Bank is that it is London based and to apply you must visit a branch.
Norwich and Peterborough is a regional building society and allows you to open an account online or over the phone. However, it charges £5 a month if you don’t use the account regularly i.e. make five transactions a month.
Action point: Compare how much your bank charges you with our table of overseas debit card charges
The best credit card for spending abroad
The Halifax Clarity MasterCard came top of the table for credit cards costing on average £419 in our scenario. The card charges 12.9% interest on all transactions, no foreign exchange mark up on the exchange rate and no additional charges for making purchases or withdrawing cash from an ATM.
Action point: See our credit cards for use abroad table for a round-up of the best deals on the market
The best travel prepaid cards
The Travelex Cash Passport Globe and FairFx Anywhere sterling prepaid cards offered the best value costing on average £423 and £426 respectively in our scenario. Sterling prepaid cards work by loading money onto the card in pounds, when the card is used abroad the money is converted in to the local currency via the rate offered by card network on the day of the transaction.
Travelex applies a 1.49% mark up on the exchange rate offered by MasterCard and charges no fees for purchases or cash withdrawals made abroad. FairFx applies a lower 1.4% mark up on the MasterCard exchange rate and no fee for purchases made abroad.
However, Fair FX charges £1 per withdrawal, making it slightly more expensive than Travelex in our scenario. Both allow you to load money on to the card free of charge via direct debit.
The worst prepaid cards to use abroad
Endsleigh’s sterling prepaid card offered the worst deal costing on average £460 in our scenario. This was due to a poor exchange rate offered on the card as well as the £2.25 cash withdrawal fee and 2.25% debit card load fee.
The Virgin Money Prepaid Travel Euro/Dollar Card offered the next worst deal charging on average £451, based on a less competitive exchange rate and also a cash withdrawal fee of €1.5.
Which? credit card expert Bobby Nicholls says: ‘If you are a frequent holiday maker choosing the right card to take abroad can save you a significant amount in overseas card charges and poor exchange rates.
‘Changing current account just for holiday use may be a bit of a tall order, but applying for a best rate credit card or prepaid card is less time consuming and will make a saving in to your holiday spend in the long run.’