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5 Jul 2019

Barclaycard scraps free spending overseas on credit card: will you be affected?

Find out the best credit cards to take on holiday

In bad news for UK holidaymakers, Barclaycard has announced its Platinum Cashback Plus credit card will no longer offer fee-free spending and cash withdrawals abroad.

Instead, cardholders will face a non-sterling transaction fee of 2.99% for all overseas purchases and cash withdrawals, which could make a big difference to your credit card bill.

The changes currently only apply to new applicants. Existing customers won't be affected, and can continue enjoying fee-free foreign spending until 31 August 2023.

Which? explains how the changes could affect you, and where to find the best credit cards for spending abroad.

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Why has Barclaycard made these changes?

Barclaycard's Platinum Cashback Plus card had previously been one of the best-rated travel credit card options. Not only could you spend fee-free, but you could make interest-free cash withdrawals on your credit card overseas.

Provided you paid off your balance in full each month, you also wouldn't be charged any interest on these cash withdrawals - as long as you opted to pay in the local currency and not convert at the ATM.

However, the card also has a popular cash back feature, which the bank has suggested it is now focussing on instead.

A statement from Barclaycard said: 'We have been trialling different versions of the Barclaycard Platinum Cashback card since November 2018.

'For the most recent stage of our trial, we are testing a version which offers 0.25% cash back on everyday spend.'

What are the best travel credit cards?

It's worth getting a specialist travel credit card before you go abroad, as you'll dodge the fees other credit card providers issue.

These fees include:

  • Non-sterling transaction fee - typically up to 2.99% of the transaction value
  • Non-sterling cash fee - around 3% (or a minimum of £3) when you take money out of an ATM.
  • Interest on cash withdrawals - interest on cash withdrawals accrues straight away, until the date you pay off your balance.

The table below shows the cheapest cards for fee-free overseas spending that don't require you to hold an existing product with the provider.

They are placed in order of lowest representative APR.

Credit card and issuerNon-sterling transaction feeNon-sterling cash withdrawal feeCash withdrawal APRRepresentative APR
Metro Bank Credit Card (Mastercard)0%*0%*14.9%14.9%
Santander Zero Credit Card (Mastercard)0%0%18.9%18.9%
Tandem Cashback Credit Card (Mastercard)0%0%18.9%18.9%
Halifax Clarity Credit Card (Mastercard)0%0%18.9%19.9%

*0% fee only applies in Europe. Non-sterling transaction fee outside the EU is 2.99%, and there's also non-sterling cash withdrawal fees. Source: Which? Money Compare. Correct 4 July 2019.

Before making your decision, make sure you check for any caveats.

The Santander card requires the transaction fees to be made in the local currency, and - like the Halifax card - has no cash withdrawal fees anywhere in the world. The Metro Bank card, by comparison, only has free transactions in Europe.

Tandem's card charges interest from day one, but also offers a cashback feature where you'll earn 0.5% on every purchase above £1 bought in the UK and abroad.

Top tips for using travel credit cards

Regardless of how great your travel credit card is, you should still be vigilant when spending abroad, as it's all too easy to spend more than you need to.

These handy tips should help on your next trip:

  • Don't withdraw cash: even with a card that doesn't charge fees for ATM withdrawals, you'll typically start incurring interest straight away. If you pay off you credit card quickly, you might be able to avoid these charges, but it's not guaranteed. What's more, there's also a chance of harming your credit rating by making cash withdrawals on your credit card.
  • Spend in the local currency: retailers and cash machines will sometimes give you the option to pay in pound sterling, instead of local currency. The exchange rate offered by the ATM or card machine will almost always be worse than that offered by your credit card, so always opt for the local currency.
  • Avoid borrowing if there's no 0% period: aim to pay back what you owe each month to avoid interest fees, unless you can get a card with a 0% purchase period.

As an alternative, a number of banks offer debit cards with appealing overseas offers, including fee-free spending and free withdrawals. You can see which ones are top-rated in our guide to the best debit cards to use abroad.

Another option might be a prepaid card, which allows you to load money onto it before you travel. These are a safer alternative to cash and allow you to limit your spending on holiday. Just keep in mind that there's no borrowing facility - so you might want to take a credit card as well to cover any emergencies.

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.