Have card, will travel - tips for using your card abroad

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  • | by Kristian Dando

Credit cards can be a darn handy asset at your disposal when on holiday, providing you use them with a bit of suss. They can make purchases more secure on any items you buy whilst away, negate the need to carry big wads of cash around and help you save money on essential stuff like getting cash out of machines. Some credit card providers even throw in travel insurance into their deals.

Fretting and agonising over what card to use in a particular situation is the sort of bother that nobody wants when trying to unwind, but just being a bit mindful of using the right card for the job at hand, or at least re-familiarising yourself with the charges associated with using your card when abroad, could make you less light in the wallet department when you get back home. You might even want to consider applying for a card which offers free use abroad if your holiday isn’t for a while – financial research firm Defaqto has rather handily cobbled together a list of ones which don’t charge. (below)

David Black, Defaqto's insight analyst for banking, said: ”It’s important for people to think about how they will manage their money while abroad to avoid a nasty additional financial shock when they return home. Cards can be an effective way to spend overseas, but each type of card has costs and benefits which people need to consider. In addition, within each card type there is significant variation so it really does pay for people to shop around to get the best option for their needs."

Boarding cards - top tips for using your plastic on holiday

Go native

It is generally best to get billed in the local currency rather than good old sterling because the exchange rate that your card provider uses will almost always be better compared to the exchange rate used by the retailer.

Big spenders

When spending on big purchases, some people people may prefer to use a credit card because of the extra protection provided under the Consumer Credit Act. If someone spends £100 to £30,000 on goods or services that are faulty or not delivered the credit card company will be jointly liable with the seller.

Exchange and smart

Use a credit or debit card that doesn’t charge a foreign exchange fee on overseas transactions or a fee for cash withdrawals. While you’re at it, make sure you’re familiar with all the costs and charges that you could incur when using any cards that you’ve already got before you start giving it a hammering when abroad.

That's block-busters

If you’ve ever been abroad and found out that your card doesn’t work because it’s been blocked by your provider, you’ll know that it can be pretty distressing. To avoid this happening it's worth dropping your bank or card provider a line to let them know what you’re up to – the chances of getting your card blocked will be much lower.

No fee zone

Cards which offer charge-free use whilst abroad, courtesy of Defaqto

Credit cards

The following credit cards do not currently levy a foreign exchange fee on overseas purchases: - Halifax Clarity Credit Card - Metro Bank Credit Card - Nationwide Building Society Gold Card (no foreign exchange fee charged until 31st July 2011) - Post Office Credit Card - Saga Platinum Credit Card (only available to those aged 50+) - Sainsbury's Gold Credit Card (it charges £5 per month but provides incentives which include free multi-trip family travel insurance) - Santander Zero Credit Card (only available to Santander current account customers)

The following credit cards do not currently charge a fee on cash withdrawals or a foreign exchange fee on overseas transactions: - Halifax Clarity Credit Card (typical 12.9 per cent APR charged on cash advances from the date debited to the cardholder's account) - Metro Bank Personal Credit Card (typical 13 per cent APR charged on cash advances from the date of withdrawal) - Sainsbury's Gold Credit Card (interest free credit on purchases and cash advances if the cardholder repays the entire balance on time every month. It charges £5 per month but provides incentives which include free multi-trip family travel insurance) - Santander Zero Credit Card (typical 27.9 per cent APR charged on cash advances from the date debited to the account - the card is only available to Santander current account customers)

Debit cards

Debit cards which do not charge a fee for purchases or ATM cash withdrawals overseas are available from the following current accounts: -Cumberland Building Society Current Account (only available to people living in Cumbria, North Lancashire, South West Scotland or West Northumberland) - Metro Bank Personal Current Account - Norwich and Peterborough Gold Current Account - Santander Zero Current Account (only available to qualifying Santander mortgage, savings or investment customers)

Remember that that some independent ATMs or retailers may levy a fee, so having one of these cards won’t always shield you from pesky charges! Also, bear in mind that a transaction that takes you into an overdraft, or an increased overdraft, will probably incur overdraft interest, fees and charges.