Credit card use to cost holiday-makers £327mWhich? shows how to avoid card fees abroad this summer

10 July 2013

Beach Holiday

Up to 12 million holiday-makers could rack up £327 million in fees by using their credit cards abroad, according to findings in a new survey by uSwitch.

The majority of credit and debit cards on the market currently charge a foreign loading fee ranging from 2.75% to 2.99%, charged on all purchases and cash withdrawals made abroad. 

On top of this, holiday-makers withdrawing cash on their cards are generally hit with an additional fee which can be as much as 3% or a minimum of £3 per withdrawal on a credit card. For debit cards, the charge tends to be slightly lower at 1.5% to 2% with a minimum of £1.50 to £2.

Use our guide to find out what your debit card provider charges to use your debit card abroad.

How can I avoid overseas card fees?

A handful of credit and debit cards on the market waive some or all of these overseas charges. 

Best credit cards for use abroad

The Saga Platinum Visa, Nationwide BS Select Visa, Halifax Clarity MasterCard, Post Office Platinum MasterCard and Capital One Aspire World MasterCard all waive the foreign exchange loading fee that is charged by the majority of cards on the market. 

While the Halifax Clarity MasterCard doesn't charge a fee for cash withdrawals, it still charges a standard 12.9% APR on both purchases and cash withdrawals. There are no interest free days on cash withdrawals, so make sure you pay off your bill in full at the earliest opportunity if you withdraw cash.  

Which? tip: Always make sure you pay off the credit card bill in full each month to avoid paying interest on purchases. Generally, it is also best to stick to just making purchases with these credit cards as most still charge a fee for withdrawals and have no interest free days for these transactions. Supplementing a good prepaid card specifically for cash withdrawals may offer good solution.  

Visit our table to compare the best credit cards for use abroad.

Best debit cards to take abroad

Current accounts from Norwich and Peterborough Building Society and Metro Bank currently charge no foreign loading fees for transactions abroad. The Norwich and Peterborough Building Society Gold Classic account waives the £5 account fee if you pay £500 a month in to the account whilst and the Gold Light account waives the £5 fee if you make at least five transactions a month. With both, if you have more than £5,000 in the account the fee won't apply. 

It is worth noting that while these providers don't charge ATM fees abroad, some international ATMs may still charge a fee.  

See how much you current account provider charges to use your debit card abroad

Best prepaid cards for use abroad

Although the prepaid card market is still relatively small, some of the best deals on the market still offer better value than than the majority of debit and credit cards on the market.

There are two main types of prepaid card on the market:

  • Sterling prepaid cards - Money loaded onto these cards remain in sterling and are converted into the local currency when you make a transaction abroad. Most charge a small mark up on the network exchange rate offered by Visa or MasterCard. These cards are therefore suitable to use in any country. To compare the best deals on the market see our online table of best sterling prepaid card.
  • Dedicated currency prepaid cards - These are typically offered in Euro or US Dollar currencies. They differ from Sterling prepaid cards in one key way in that the money loaded onto the cards is converted into the currency of the card when it is loaded. These cards can work out as a good deal if you load money onto the card when the exchange rate is favourable. To find the best deal on the market see our table of Euro and US Dollar prepaid cards.

It is worth noting that using prepaid cards to pre-authorise hotels or car hire will block access to money on your card. For more information read our guide on prepaid cards.

More on this...

  • Travel money - Tips for finding the best money exchange rates
  • Best sterling prepaid cards - Find out which is the best sterling prepaid card
  • Best credit cards to use abroad - The best credit cards for use overseas