23rd July 2021
Paying for goods and services by debit or credit card is quick and convenient, and many people – especially those who don’t feel secure carrying a wallet full of foreign currency around – prefer to pay with plastic while on holiday.
However, your ‘flexible friend’ might turn out to be a fiend if you use it for foreign transactions. This is because many debit and credit cards apply hefty fees to payments and withdrawals made abroad – and if you’re a big spender, these could add a significant sum onto the cost of your holiday overall.
When it comes to avoiding the other charges foreign credit card transactions incur, all you need to do is to choose a credit card that won’t charge you for making purchases overseas.
The Which? credit card comparison tables let you search all available cards from providers large and small to choose the best deals based on quality of service as well as cost and benefits.
Here are some of the hidden charges which many credit card issuers tend to apply when you use your plastic abroad:
Before using your debit card abroad, check with your card provider what fees will apply to any transactions you make. You may find it’s cheaper to take out a large sum from a cashpoint at the start of your holiday than to use your debit card for repeated withdrawals and over-the-counter transactions.
Using the wrong debit card on holiday could be just as costly as spending on some credit cards. Here are some of the hidden charges to look out for when issuers using a debit card abroad:
There are certain situations where paying with plastic makes more sense than using cash – particularly if you have the best credit or debit card for spending abroad.
Using your credit card when you make big purchases – such as booking flights, activities or paying for your hotel – will mean you get extra protection should something go wrong. This is because purchases costing over £100 and up to £30,000 are covered under which gives you the right to claim your money back from your card provider should you need to.
Finally, it’s probably a good idea to tell your debit or credit card provider you’re planning to use your card on holiday before jetting off. Providers sometimes block cards if ‘unusual transactions’ – such as overseas spending – are taking place. While this is a measure designed to guard against fraud, it can lead to inconvenience when holidaymakers try to spend on their cards legitimately.
Also, note that it’s increasingly common for overseas retailers to ask whether you’d prefer to pay in the local currency or sterling when you are settling a bill by credit or debit card.
Unless you can be sure the exchange rate you’d get for paying in pounds sterling is competitive, it’s best to steer clear of this option and pay in the local currency of whichever country you’re visiting.