Using your credit card abroad
The right credit card can be a very helpful tool when you go abroad. But if you’re not careful, your holiday could end up costing a lot more than you thought due to hidden charges and inflated exchange rates.
We’ll tell you all you need to know about how to properly use your credit card when you go away, including how to pick the right card to begin with.
In This Guide:
- Exchange rates
- Choosing the right card
- Avoid cash withdrawals
- Don't rely solely on your credit card
- Make sure you pay in the local currency
No matter how you’re spending your money abroad, you’ll want to make sure that you’re taking advantage of the best foreign exchange rates possible.
You might be tempted to head to your local high street bureau de change but it is more likely that you will find better rates online. You should also be aware that cash advance fees will apply if you purchase cash from a bureau de change. The reason for this is that your credit card is not intended to be used for cash withdrawals.
If you choose the right credit card, you’ll be able to enjoy great exchange rates when you make transactions in your destination country.
For example, the Post Office issues a MasterCard that will allow you to make purchases in Europe at the MasterCard daily Euro exchange rate. With a card like this you’ll get more for your money than you would by simply changing your cash on the high street.
Choosing the right card
There are various different credit cards available that are designed specifically for use in foreign countries.
Most conventional cards will charge you foreign transaction fees on any purchases you make whilst in another country. Generally, foreign transactions are charged at around 3% but this will vary depending on your card issuer.
If you head over to our credit card comparison page, you’ll be able to look through the best cards available that charge 0% interest on foreign transactions.
Avoid cash withdrawals
You should, wherever possible, avoid making cash withdrawals using your credit card as doing so will come with rather hefty charges.
This applies to withdrawals made anywhere, but doing so in foreign countries will come with even higher charges than doing so at home.
You should stick to using your credit card to make purchases via chip and PIN machines. If you really need to get some cash, then it is likely that your debit card will be subject to fewer fees than your credit card.
Don't rely solely on your credit card
Credit cards are accepted almost everywhere these days but you will almost certainly come across places that will not take them. For this reason it is a good idea to have some cash on you for emergency purposes.
Make sure you pay in the local currency
Sometimes, you’ll be given the option of having your currency converted at the time of the transaction by the retailer. You should avoid this when possible and insist on paying in the local currency. Otherwise, you could be charged a lot for some very bad exchange rates.