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Four reasons to use a credit card on holiday

Learn how to save money by taking the right card abroad

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If you’re planning on flying abroad this summer, you can save a fair amount of money by taking the right credit card with you. 

When used properly, credit cards can offer tempting rewards for those spending money overseas, as well as added protection to tourists if something goes wrong.    

Here, we explain which credit cards are best for overseas use and suggest four benefits of using them whilst abroad.

#1 Earn airline and hotel rewards

There are certain credit cards that offer airmiles or travel vouchers as part of their reward schemes and pay a better reward rate on purchases of flights or gifts with certain airlines. 

Many of these cards include a host of other travel benefits, including airport lounge access or flight upgrades, and are therefore popular with frequent travellers.   

There are some tempting cashback deals available as well. For example, Santander recently launched a temporary 1% cashback deal for those using its 123 Credit Card to pay for flights, hotels or package holidays. 

Which? Comparison Table – Best credit cards for travel rewards – our tables are updated in real-time

#2 Avoid hefty foreign transaction fees

It’s common for credit and debit card providers to hit customers with foreign loading fees of up to 3% whenever they use their card abroad.

Cardholders can also expect to be subjected to exchange rates set by Mastercard or Visa and expensive interest charges on ATM withdrawals regardless of when the balance is paid off.  

But, you can significantly reduce these costs by using a credit card specifically designed for overseas use. 

The Halifax Clarity Credit Card, for example, charges no loading fees for overseas purchases or ATM withdrawals, whilst its representative APR of 12.9% is one of the lowest on the market.  

Which? Comparison Table – Best credit cards for overseas use – our tables are updated in real-time

#3 Protect yourself against unforeseen circumstances

Most credit card purchases receive enhanced purchase protection under Section 75 of the Consumer Credit Act.

This states that credit card providers are jointly responsible with retailers for the provision of goods or services valued between £100 and £30,000. 

This can help you retrieve money in the unfortunate circumstance of your travel provider going bust, even if you haven’t purchased travel insurance.

Consumers may also be able to use the chargeback system to claim a refund on any credit card purchases that are not as described.  

Go further: What is Section 75 of the Consumer Credit Act? – our guide explains all you need to know

#4 Defend yourself against thieves and pickpockets

In the unfortunate event of your credit card being lost or stolen, it should be relatively stress-free to get back on your feet. 

With one simple phonecall, your credit card provider should be able to cancel your credit card, preventing thieves from racking up a huge bill. 

Many credit card providers will be able to arrange the delivery of a new card or emergency cash funds as well – and some even promise to do this within 24 hours.   

Go further: What to do if your credit card is lost or stolen – a step-by-step guide

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