travel credit cards

Travel credit cards

One of the cheapest ways to spend abroad

If you're planning an overseas trip, or regularly buy from overseas websites, a specialist travel credit or debit card is one of the cheapest way to spend as it gives near-perfect exchange rates worldwide. This guide includes the top-pick travel cards, the cards to avoid, and how to check what your card's charging you. 

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How do travel credit and debit cards work?

Most credit and debit cards let you spend abroad, but will charge you for the privilege. Although your card provider gets near-perfect rates, it usually adds a 'non-sterling transaction fee' of about 3% – so £100 worth of foreign currency costs you £103.

On top of this, many debit cards charge a flat fee (typically 50p-£1.50) each and every time you spend overseas, regardless of the amount. Withdrawing cash usually attracts fees and unavoidable interest on credit cards. See hidden holiday spending charges for full details.

The good news? There are specialist travel cards that don't charge these fees, so you get the same near-perfect rate the bank does when it processes your transaction. This is usually a couple of days after using the card, so you won't know the exact rate you're getting at the time. If you're worried about currency swings, consider a prepaid travel card where you can lock in a rate.

A specialist card can save you over £100 per holiday

Here's how much spending $1,000 can cost in pounds (we assumed five $100 cash withdrawals and 20 transactions of $25 each on the cards):

  • Top specialist credit/debit card repaid in full: £818
  • Cash via cheapest bureau (pick up in London): £821
  • Cash from M&S on the high street: £829
  • Using a debit card with a spending charge: £872
  • Changing cash at airport (not pre-ordered): £949

As you can see, the differences can be sizeable, yet the winners are simple. Apply for a specialist overseas card, then use it every time you go.

How much does your card charge?

Never just blindly spend abroad with ANY card, use our tool to find out what it'd cost you to pay with your existing plastic before slipping it into your suitcase. Then compare that to our top-pick travel cards which don't charge, so you're armed with the cheapest way to spend before you set off.

Beware using any of these cards overseas

Let's make this plain: don't use the cards in this section for spending overseas. Unless you're spending euros in the EU, Iceland, Liechtenstein or Norway, the cards below charge 50p-£1.50 for transactions on top of their normal exchange-rate charge.

Imagine you buy something for the equivalent of £5 in a shop in the USA. With the worst of these cards, it can end up costing £6.60 with the fee and charges.

The cards with a spending charge

Debit card Exchange load (mark-up) ATM charge (i) Spending charge (i)
Clydesdale/Yorkshire Bank (ii) None 3.75%, min £1.50 (iii) 2.75%, min £1.50 (iii)
Intelligent Finance (ii) 2.25% £1.50 £1.50
TSB 2.99% 1.5% (min £2, max £4.50) £1
Bank of Scotland 2.99% £1.50 50p
Lloyds Bank 2.99% £1.50 50p
Halifax 2.99% £1.50 50p

(i) Except on payments in euros within EEA. (ii) Existing customers only. (iii) Except on transactions in euros, Swedish krona and Romanian leu within the EEA. 

Travel card need-to-knows

Before you go on holiday, there are some things you need to know about how credit and debit cards work overseas. Get this wrong and it can cost you large, so please read the following (even if you only have time to read and remember the headlines, it should help protect your pocket).

  • Specialist overseas credit cards can be the best way to spend when you're on holiday, but can turn into one of the worst ways if you're not disciplined enough to pay them off. Always follow the golden rule: 

    "Set up a direct debit to repay in full every month, or the interest charges dwarf the cheap-currency gains."

    Direct debits may be marked 'inactive' if a card hasn't been used in a 13 month period – so if your hols have more than a year between them, check the direct debit is still in place. 

  • Many overseas hotels, shops and ATMs ask this when you pay by card. If you choose pounds, the retailer does the currency conversion – but rates can often be poor compared with letting your card do it – see Martin's euro analysis for how this worked for him on a European trip.

    If you've got a top overseas card, ALWAYS choose the local currency, as your card does the exchange and it's unbeatable.

    If you're using a bog-standard credit or debit card, it's touch and go. Sometimes the card machine will show you the 'non-sterling cash fee'. If this is under 2.5%, go with pounds. If it's over, pick the local currency.

  • If you've a top overseas credit card, spending is almost always cheaper. Even on cards with no cash withdrawal fees, you'll usually still pay interest on the withdrawal until you pay it off.

    This goes double for non-specialist credit cards. You'll pay the non-sterling transaction fee on all transactions overseas, but you'll also pay a fee and interest on cash withdrawals.

    On debit cards, spending is still cheaper as while there's no interest on a cash withdrawal, there's often still a fee (as well as the non-sterling transaction fee) when you use a cash machine.

    Should I withdraw my travel money in the UK or overseas?

    If you're going to get the cash out on a specialist overseas card, then it's better to wait until you're there.

    However, if you're just planning to use a normal card or convert pounds when you're out there, there's no guarantee you'll get a better rate – and certainly changing in most hotels is normally a bad idea as they give poor rates. Overall it's safer to use TravelMoneyMax and get the cheapest rate while you're here.

    Does withdrawing cash on a credit card affect my credit score?

    Any cash withdrawals you make on a credit card will be recorded at the credit reference agencies. On their own, they shouldn't matter too much, but if you have a history of poor credit, or you're looking to make an important credit application soon, they're best avoided.

    Because it's usually quite expensive to withdraw cash on a credit card, lenders may see it as you being desperate for cash, and will count it against you if you apply to them.

    For more information on the pros and cons, read our guide to withdrawing cash on a credit card.

  • When you spend abroad, your bank gets an almost perfect rate when it does the exchange for you. It exchanges at Mastercard's, Visa's or Amex's wholesale rate, all of which are pretty close to the spot rate that the currency markets suggest (the perfect rate).

    When we compared rates across June to August 2021, Visa had a slightly better exchange rate on 91 occasions, with Mastercard winning 72 times. The differences were also very small, often a few pence per £100 of currency – so there's little to separate them.

    Most banks then charge you for having them make the exchange for you, and this is where the up-to-3% non-sterling exchange fee comes in. That's why you should always get one of the specialist cards in this guide, which don't add fees on top.

Top travel credit cards

These are the best credit cards to use abroad – all have no exchange fee when you spend on the card, and a couple even have fee-free and interest-free overseas cash withdrawals.

We've marked whether each card's a Mastercard or a Visa as it does make a slight difference to their exchange rates (Visa tends to be a touch better – see Mastercard vs Visa rates for more).

Top travel credit cards for new cardholders 

A travel debit card could be cheaper. If you're happy opening a new app-only current account and loading funds before you go, you can get near-perfect exchange rates and up to 1% cashback on most spending worldwide. See top travel debit cards.


Barclaycard Rewards Visa
The top pick as it charges no fees or interest on spending AND overseas cash withdrawals, provided you repay in full. Plus there are a couple of perks – you get 0.25% cashback on almost all spending & it also gives five months free access to Apple Music, Apple Arcade, Apple News+ and/or Apple TV+. Just diarise to cancel after the five months is up if you don't want to pay the subscription fee.

- No fees on spending or ATM withdrawals overseas
- No interest on cash withdrawals if paid IN FULL
- 0.25% cashback on most spending

- 23.9% rep APR

Check eligibility
Apply*


Halifax Clarity Mastercard

The Halifax Clarity is a long-term top pick as it has no fees on overseas spending and low ATM interest. You don't get charged interest on spending abroad as long as you repay IN FULL, but you will if you make cash withdrawals (about 5p per £100 per day) – so try to minimise these.

- No fees on spending or ATM withdrawals overseas
- 22.94%-28.94% interest on cash withdrawals, charged daily until it's paid off

- 22.9% rep APR

Check eligibility
Apply*
Next best specialist travel credit cards. Here are quick details of decent alternatives.
118 118 Money Mastercard
for poorer credit scorers
- No fees on spending or ATM withdrawals overseas
- No interest on cash withdrawals if paid IN FULL
- 34% rep APR if not paid in full
Check eligibility (1)
The NatWest Credit Card Mastercard
for existing NatWest customers only
- No fees on overseas spending, 3% fee (min £3) on ATM withdrawals
- 26.9%-29.9% interest on cash withdrawals, charged daily until it's paid off
- 12.9% rep APR
Check eligibility
Apply*
Virgin Money Travel Credit Card Mastercard

- No fees on overseas spending, 3% fee on ATM withdrawals

- 28.9% interest on cash withdrawals, charged daily until it's paid off
- 22.9% rep APR (2)

Check eligibility
Apply*
Zopa Credit Card Visa

- No fees on overseas spending, £3 fee on ATM withdrawals

- 34.9% interest on cash withdrawals, charged daily until it's paid off
- 34.9% rep APR

Check eligibility
Apply

See all official APR examples. (1) 118 118 Money has told us you have a better chance of getting its card if you go via our eligibility calculator, but if you prefer you can go direct to 118 118 Money* instead. (2) All accepted get 0% for the first nine months on spending.

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Top overseas debit cards

It's also possible to get debit cards that don't charge a non-sterling transaction fee. With Chase, Starling and Virgin Money you'll need to open a new bank account, though Chase and Starling only do a 'soft' credit check to see if they want you as a customer.

While some of these accounts can be top-pick accounts to switch to in their own right – see Best bank accounts – if you're happy with your existing bank, you can open all these as a secondary account just for the debit card (assuming you pass the bank's credit check). Though unlike a credit card, you will need to preload your account before using it, which some find a pain. Currensea is different, as here you just open a debit card account that links to existing cards, it's not a bank account in its own right.

We've also marked whether each card's a Mastercard or a Visa as it does make a slight difference to their exchange rates (Visa tends to be a touch better – see Mastercard vs Visa rates for more).

Top travel debit cards




Chase Mastercard

Fee-free spending and cash withdrawals worldwide, plus activate 1% cashback for 12 months. Unlike the credit cards above, Chase only runs a 'soft' credit check when you apply – so there's no permanent mark on your credit report.

However, Chase is app-only, so you'll need an Apple iPhone or iPod touch running iOS 14.1 (or later) or a device running Android 8.1 (or later) to get it.

 

If you're thinking of switching to Chase, or using it as your main bank account, read our full Chase review.  

- No fees on spending or at ATMs
- ATM limits: £500/day, max £1,500/month overseas
- 1
% cashback on most spending for one year, once activated in the app
Apply*
starling bank card image

Starling Bank Mastercard
Fee-free spending and cash withdrawals anywhere in the world. Like the Chase account above, Starling only does a 'soft' credit check (unless you also apply for an overdraft) – so if you don't get it, there won't be a permanent mark on your credit report.

If you're thinking of switching to Starling, or using it as your main bank account, read our full Starling review

- No fees on spending or at ATMs

- ATM limits: six per day, max £300/day

Apply*

virgin money card image
 

Virgin Money Mastercard

Fee-free spending and cash withdrawals worldwide, but requires 'hard' credit check. As an added boon, it also pays a decent 2.02% interest on credit balances up to £1,000.

Newbies switching to this account can also get 20,000 Virgin points, which can be exchanged for a variety of gifts and experiences. See our full review to check it's right for you.

- No fees on spending or at ATMs

- ATM limits: £500/day

 Apply*

currensea card image
 

Currensea Mastercard

Currensea is a good option if you don't want to open a whole new bank account – though its rates can be slightly worse than the three above. Here you link your existing current account to Currensea's debit card. Then when you spend or withdraw on the Currensea card, it charges your linked current account in pounds, neatly avoiding your bank's exchange fees.

On its free 'essential plan', Currensea has no ATM fees for withdrawals up to £500/month (it's 2% above), though it does have
 a flat 0.5% exchange fee on the interbank/Mastercard exchange rates it uses. This means the cards above usually beat it on rate for currencies such as Euros, US and Australian dollars, though there's not much in it. See full info on how Currensea works.

- No fees on spending or at ATMs

- Fee-free ATM limits: £500/month

Apply*

Want to complain about your credit card?

If your card company has charged you the wrong amount, charged interest when it shouldn't have or its service has been atrocious, then you don't have to suffer in silence.

It's always worth trying to call the provider first to see if it can help, but if not, you can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.

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