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travel credit cards

Travel Credit Cards

One of the cheapest ways to spend abroad

Josh Kirby
Josh Kirby | Edited by Helen Saxon
Updated 13 September 2021

Overseas travel is still disrupted, though things have finally started to open back up. If you're planning an overseas trip, or regularly buy from overseas websites, a specialist travel credit or debit card is 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. 

Top pick travel credit and debit cards

Cheap travel money alternatives:

Not sure what's right for you? See Cheap Travel Money Tips.

illustration

How do travel credit cards work?

Specialist travel cards are so good for spending abroad and on overseas websites because they don't charge exchange fees. Use your everyday plastic while on holiday and you could be hit by a host of hidden charges.

These include adding a non-sterling transaction fee of around 3%, cash withdrawal fees and interest charges even if you pay off in full (for full details, read the hidden holiday spending charges note).

Use this checker to find out what you'll pay when using your existing card and check out our top pick cards below to find cards that don't charge.

Important. We're in the process of updating the tool below. In the meantime, it's worth double checking the info with your card provider directly. 

The 7 need-to-knows when spending abroad

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).

  • 1. You can save £100s per holiday using a specialist card

    When abroad you want to pay for only what you buy, yet using any bog-standard card means you're paying to pay, too. Here's how much spending €1,000 actually cost, in pounds, when we made comparisons in July 2019 using our Travel Money Comparison tool (we assumed five €100 cash withdrawals and 20 transactions on the cards).

    • On a specialist credit card repaid in full: £912 
    • Cash, via UK's cheapest bureau (pick up in London): £923 
    • Cash from M&S (non-cardholder): £933
    • Top prepaid card: £923
    • Using a debit card from hell: £972 
    • Change at airport (Gatwick South Terminal, ICE Travel Money, not pre-ordered): £1,030

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

    However, it's worth noting you don't usually get the rate on the day you spend. You actually get the rate on the day the transaction is processed by your card provider, which is usually a day or two after you used the card, but could be up to a week later.

    This is important, as if there are movements in the currency markets between you making the purchase and your card provider processing it, then you could end up paying more (or less) for what you bought than you thought you were going to.

  • 2. If you're using a credit card, ALWAYS pay it off IN FULL every month

    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. 

  • 3. If they ask whether you want to pay in pounds or the local currency, always pick the local currency

    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.

  • 4. Beware your debit card – it could be the worst way to spend

    Let's make this plain: do not use the cards mentioned in this section for spending overseas, particularly outside Europe.

    Thankfully, new regulations mean spending fees now CAN'T be charged for purchases made in euros in the EU, Iceland, Liechtenstein and Norway (the European Economic Area/EEA). But the cards below continue to charge 50p-£1.50 for transactions in other countries and currencies – meaning it's still best to avoid them.

    Here's how these cards differ...

    With most debit cards, you pay a non-sterling transaction fee for spending, typically around 3% of the transaction, and a charge if you withdraw cash abroad.

    But these cards have another sneaky charge for spending: a fee of 50p-£1.50 each time you use your card. Imagine you buy something for £5 in a shop. With the worst of these cards, it can end up costing £6.60 with the fee and charges.

    The cards from hell

    IF Debit Card (existing custs only)

    Spending penalty: £1.50 (except on payments in euros within EEA) | Load fee: 2.25% | Cash withdrawal fee: £1.50

    Bank of Scotland Debit Card

    Spending penalty: £0.50 (except on payments in euros within EEA) | Load fee: 2.99% | Cash withdrawal fee: 2.99% + £1.50

    Lloyds Debit Card

    Spending penalty: £0.50 (except on payments in euros within EEA) | Load fee: 2.99% | Cash withdrawal fee: 2.99% + £1.50

    Halifax Debit Card

    Spending penalty: £0.50 (except on payments in euros within EEA) | Load fee: 2.99% | Cash withdrawal fee: 2.99% + £1.50

    The cards below don't have a specific spending penalty, but instead charge a minimum exchange fee, meaning these are hell for small spends. Without this, a £5 spend on these cards would cost £5.14, but this minimum exchange fee bumps it up to £6.50...

    Clydesdale/Yorkshire Debit Cards (existing custs only)

    Spending penalty: none | Load fee: 2.75%, min £1.50 | Cash withdrawal: 3.75%, min £1.50 (except on transactions in euros, Swedish krona and Romanian leu within the EEA)

    Full list of charges for major UK credit and debit cards.

  • 5. Spending is almost always cheaper than withdrawing cash when you're on holiday

    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.

  • 6. Not all cards are equal – Mastercard's exchange rate tends to beat Amex's and Visa's (though there's not much in it)

    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 last compared exchange rates, Mastercard's tended to be slightly better, though there's really not much in it.

    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.

  • 7. Looking to 'lock in' a rate? Consider a prepaid card instead

    With travel credit (or debit) cards, you get the rate when you spend or withdraw on the card – or to be completely accurate, the day the spend or withdrawal is processed, which could be a couple of days later. While there's nothing inherently wrong with this, if you're worried about currency swings a Prepaid Travel Card might be a better option.

    Some prepaid cards allow you to lock in a rate ahead of time for certain currencies – so you can effectively convert your sterling into euros/dollars before you head away. While there's no way of knowing if buying currency in advance will work out cheaper than getting the rate on the day, it may give you peace of mind.

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 (Mastercard tends to be a touch better – see Mastercard vs Visa rates for more).

Top travel credit cards for new cardholders 




Barclaycard Rewards Visa 		 The top pick as it charges no fees or interest on spending AND overseas cash withdrawals repaid in full. Plus, there are a couple of perks – you get 0.25% cashback on almost all spending & it also gives 5mths free access to 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

- 22.9% rep APR

 Check eligibility
Apply*




Halifax Clarity Mastercard

 The Halifax Clarity is a long-term top pick as it has great feedback, 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 (5p-ish per £100 per day) – so try to minimise these.

- No fees on spending or ATM withdrawals overseas
- 19.94%-27.94% interest on cash withdrawals, charged daily until it's paid off

- 19.9% 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)
NatWest Mastercard
 - 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		 Apply
Virgin Money Mastercard

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

- 27.9% interest on cash withdrawals, charged daily until it's paid off
- 21.9% 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, but with Starling and Virgin Money you'll need to open a new bank account. While 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).

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 (Mastercard tends to be a touch better – see Mastercard vs Visa rates for more).

Top travel debit cards

starling bank card image

Starling Bank Mastercard		 Fee-free spending and cash withdrawals anywhere in the world. In addition, Starling's a good choice if you're not sure whether you'll get the account as it will only do a 'soft' credit check to see if it wants you as a customer (unless you also apply for an overdraft) – so if you don't get it, other lenders won't be able to see you've applied and there'll be no 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: 6 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.

It also offers a £150 experience day voucher if you want to switch to the account, but read our full review first to check it's right for you. 

- No fees on spending or at ATMs

- ATM limits: N/A

  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 are slightly worse than the two 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.

Currensea doesn't charge ATM fees, though it does have a flat 0.5% exchange fee on the interbank/ Mastercard exchange rates it uses. This is complex, so read full info on how Currensea works.

- No fees on spending or at ATMs

- ATM limits: £500/mth

 Apply*

While the cards above are our top picks, here are some other options to consider:

  • Monzo: With its current account, Monzo charges no foreign transaction fees for spending, but the ATM withdrawal fees you pay depend on how you use your account. If you use Monzo for everyday banking, you can make unlimited fee-free withdrawals in the UK, EU, Iceland, Lichtenstein and Norway. If you use it more casually as a spending card, cash withdrawals are fee-free up to £250 in any 30-day period (3% fee above, more information here).

    If you’re anywhere else in the world, you’ll pay a 3% fee on withdrawals over £200 in any 30-day period, regardless of how you use your Monzo account. You'll need to operate the account via the app – it's available on iOS and Android.

  • Nationwide Building Society: The Nationwide FlexPlus debit card charges no fees on overseas purchases or cash withdrawals. However, FlexPlus is a packaged bank account and charges a £13/mth fee – so unless you'll use the travel insurance, breakdown and mobile phone insurance, it's not worth getting just for free overseas spending. Read more on Nationwide FlexPlus to see if it's the right account for you. 

  • Cumberland Building Society: If you have a Cumberland Plus current account with Cumberland Building Society, it charges no foreign exchange fees or cash withdrawal fees on the debit card that comes with the account. However, you need to live in its operating area – it covers Cumbria, south west Scotland, West Northumberland and North Lancashire.

Coronavirus credit card help

If you're struggling to pay off debt on an existing credit card due to coronavirus, lenders should provide support. Yet the blanket payment holiday help that used to be available has ended.

So if you're struggling to pay your credit card debt, or you're coming off an agreed payment holiday, lenders are now supposed to provide 'tailored support'. Under this, you could be offered a (further) payment holiday or a period of reduced payments, reduced interest or a repayment plan – lenders should take into account how much you can afford and how your finances are likely to change in the near future.

Providers are expected to report any support they give you to credit reference agencies, which could affect your ability to get credit in future. But don't let that put you off from contacting your provider – missing payments or defaulting is likely to have a far worse impact.

For the latest updates and full information on the support available, see our Coronavirus Finance & Bills Help guide.

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 card company first to see if it can help, but if not...

Free tool to help you complain

This tool helps you draft and manage your complaint. It's totally free to use, and it's offered by Resolver, a firm we work with to help people get complaints justice.

RESOLVER – FREE COMPLAINTS TOOL*

If the company won't help, Resolver also helps you escalate your complaint to the free Financial Ombudsman Service.

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