The best debit and credit cards to use when travelling abroad

With the summer holiday season getting under way amid a cost of living crisis, it's more important than ever to get the best deal on foreign exchange fees. Here, Saloni Sardana picks the best pre-paid cards, debit cards and credit cards to use when on holiday abroad.

It’s that time of the year when everyone is heading for foreign climes. So it is worth exploring how to avoid high fees charged by some credit card companies, banks or bureaux de change on travellers who simply haven’t done their research. 

Most people don’t want to carry too much cash in case it gets lost or stolen, so one of the best ways to cut costs is to use a travel-friendly credit or debit card or a prepaid currency card for your spending.

What is the difference between a prepaid currency card and a travel friendly debit/credit card?

If you are opting for travel-friendly debit or credit cards, the main thing to look for is which cards allow free cash withdrawals abroad and don’t charge for transactions. It is also worth finding out which ones don’t add an extra commission on the exchange rate. 

Prepaid travel cards allow you to choose the currency (be that euros, dollars or pounds) you want to add on the card. And you can easily transfer more money online while you are on holiday should you need to. Prepaid card providers make money by charging a commission when you load money onto the card, and sometimes through spending or withdrawal fees.

Providers either use the interbank exchange rate – the rate at which banks transfer money to each other, often perceived to be the optimal rate – or this rate with an extra fee on top, usually in the range of 1%-2.5%. 

With prepaid cards you can either get charged the exchange rate of the day or you can fix a rate before going on holiday to prevent any shock price rises while you are away. If you are worried about currency fluctuations, this may be a great option for you; if the pound depreciates after you top up the card, you gain, but if you lock in the money and the pound appreciates, you lose. 

Another point to bear in mind is that prepaid travel cards are often not accepted for car hire or petrol purchases, so you should carry another card 

One more thing to remember is that it is almost always a good idea to pay in the local currency. If you opt to pay in sterling, you are at the mercy of the retailer who can use any exchange rate they like, and may well charge a fee on top.

Best prepaid travel money cards

Wise

Wise, on the other hand, charges a minimum fee of 0.41%. 

Wise’s prepaid travel card allows you to make two withdrawals of up to £200 free of charge. After that, a 1.75% fee and 50p charge apply. 

EasyFX

The Easy FX prepaid travel card is a little different because it requires a minimum balance of £50. It doesn’t charge you anything to withdraw money abroad, but a £1.50 fee applies in the UK. You also have to pay £2 a month for the account even if the card is not used in a year. 

Caxton Currency Card 

The Caxton Currency Card allows you to make foreign transactions and withdraw at cash machines abroad free of charge. It also gives you £10 when you load £500. 

Best debit cards for foreign travel

Chase Mastercard

The Chase Mastercard offers zero fees for spending and withdrawing cash abroad. It also offers 1% cashback for a duration of the first 12 months. 

But you can only withdraw up to £500 a day or up to £1,500 a month when you are abroad. 

Currensea Debit Travel Card 

This debit card offers fee-free cash machine withdrawals abroad up to £500, after which a 2% fee applies. 

Otherwise, it charges a 0.5% fee across card spend and ATM withdrawals.

One advantage of this account is that you don’t need to open another account. You can simply link an existing account you have with Currensea to the debit card. 

Starling Bank

Starling Bank’s debit card charges the Mastercard exchange rate with nothing added on top. There is no fee for cash withdrawals, and limits are the same abroad as for in the UK – so you can withdraw up to £300 a day from cash machines, with no fee.

Monzo Bank

Like Starling, Monzo charges the Mastercard exchange rate for purchases in any country, with no extra fees. If you use Monzo as your main bank account or have either a Monzo Plus or Monzo Premium account, cash withdrawals are free in the European Economic Area (EEA) – but only up to £250 every 30 days. For anything over that, there is a 3% charge.

Outside the EEA, you can withdraw £200 free of charge every 30 days. Anything over that incurs a 3% fee. If you have a Monzo Plus account you can withdraw £400 fee free every 30 days, and if you have a Monzo Premium account you can withdraw £600. After that, you will be charged a 3% fee.

The best travel credit cards for new customers 

Barclaycards Rewards Visa 

The Barclaycard Reward Visa has no fees on spending abroad or on cash withdrawals, and you get 0.25% cashback on purchases. You can also get four free Apple subscriptions for up to five months. It has a representative APR of 23.9%, but if you pay off your balance in full each month, you will not incur any interest.

Halifax Clarity Mastercard

Spending abroad with this credit card is also interest free so long as you repay in full each month.  It is free of currency conversion charges, but cash withdrawals may incur a fee of up to 5%. It has a representative APR of 19.9% and charges the same interest on all of your purchases, irrespective of country, making it easy to track your finances. 

SEE ALSO:
How to claim compensation for travel delays
How to cut your car’s fuel bill as the price of petrol hits a record high

The best interest-free credit card deals

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