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Are you paying too much to use your debit card abroad?

How to find cheaper alternatives


It’s no secret that spending abroad using debit cards can be costly, but many of us still use them on our holidays. Which? shows why it pays to find cheaper alternatives.

Last month the UK Cards Association revealed that UK holidaymakers spent £26.4 billion using their cards overseas and approximately a half of all overseas transactions were made on debit cards.      

Since the vast majority of debit cards on the market apply overseas fees, its clear many consumers are paying banks a premium for this service.

The banks with the highest overseas fees include Bank of Scotland, Halifax, Lloyds Bank, Santander and TSB that each apply separate fees to make a purchase and a cash withdrawal.

For example if you made 15 debit card purchases abroad, each worth £25, you would be charged £32.81 by Halifax, £29.06 by Santander, and £26.21 by Lloyds Bank, TSB and Bank of Scotland.   

However, you can avoid these fees by opting for a credit card which charges no foreign loading fees.    

Best credit cards for overseas use

There are a handful of credit cards on the market that make no overseas charges on purchases made abroad.

As long you pay off the bill within the interest-free period you can effectively pay fee-free on card purchases.

We rank the cards that attracted the most application queries from users of Which? Money Compare during the last month.

Which? Money Compare Table – Best credit cards for overseas use

3rd place: Halifax Clarity MasterCard

This card offers great all round value, imposing no charges on overseas purchases. In our latest customer satisfaction survey the provider received a 57% customer score. 

Unfortunately Halifax have recently increased the card’s representative APR from 12.9% to 18.9% so you should always make sure you pay off the bill in full when it is due.

It charges no fee for cash withdrawals, although you will pay interest of 18.9% APR on the cash immediately. Click here to find out more.

2nd place: Post Office Platinum MasterCard

A popular card among Which? members, this received a 67% customer score in our latest customer satisfaction survey. This card has no fee on overseas transactions. It comes with an representative APR of 17.8%  on purchases .

It’s best to stick to making just card purchases however, as this card makes a 2.5% (min £3) fee on cash withdrawals and charges interest of 27.9% APR as soon as you take out the cash. Click here to find out more.

1st place: Saga Platinum Visa 

Currently a Which? Recommended Provider for credit cards, Saga received the highest customer score, of 76%, in our latest credit card satisfaction survey. 

This card charges no fees on foreign transactions and applies a competitive 11.9% representative APR on purchases. 

Cash withdrawals attract a 2% (min £2) charge and a 19.6% APR interest rate. However there is a interest-free period of 55 days from the day of withdrawal provided the balance is paid in full and on time. Click here to find out more.

Best travel prepaid cards 

Travel prepaid cards remain a niche product, but some offer good value. They come in two types; currency designated cards (such as euro or dollar prepaid cards) where sterling is converted to the foreign currency at the time it is loaded on to the card and sterling prepaid cards, where money that is loaded on to the card remains in sterling and is converted at the point of transaction.    

We’ve reviewed a selection of euro and dollar prepaid cards and sterling prepaid card, and ranked them based on the exchange rate.

More on this…

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Credit cards & loans, Money

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