Our Pick Of The Best Travel Credit Cards
The majority of credit and debit cards charge fees when you use them abroad. However, there are some notable exceptions and packing one of these instead means your spending goes on you, not your credit card provider.
We’ve compiled some research (August 2024) into the travel credit card market and listed the best deals we found, below. Being accepted for any of these cards is only possible with a strong credit score. However, your application will be processed through an eligibility checker which won’t leave trace on your credit report.
Best Travel Credit Cards For Overseas Travel
How are the overseas cards ranked?
To arrive at our star ratings, we considered several factors which we based on the following order of importance:
- fees for overseas use: cards with no foreign transaction fees, no cash withdrawal fees and no interest (if monthly balance is cleared) being given priority
- representative APR: the interest you might be charged if you fail to clear your balance (varies by applicant)
- promotional periods and perks: any 0% deal on purchase, balance transfers or money transfers (a useful but secondary purpose to the card).
What’s different about travel credit cards?
A specific travel credit card is designed to help you spend cost-efficiently when you are abroad. That’s because, unlike a standard credit card (or even debit card), you won’t be hit by fees every time you use it.
And these are fees that can otherwise soon mount up.
For example, standard credit cards charge foreign transaction fees for converting the amount spent on the card from the local currency into pounds sterling. This is usually around 2.99%. So if you spent £100, you’d be charged £2.99.
They also usually levy a cash withdrawal fee, which is charged on top of the foreign transaction fee. This means that withdrawing £100 could cost you £5.98 (£2.99 + £2.99), taking both fees into account. The best travel credit cards don’t charge either a foreign transaction or cash withdrawal fee.
However, you can still expect interest to be charged on both types of transaction. And, in the vast majority of cases, interest on cash withdrawals (usually higher) kicks in with immediate effect – even if you settle your bill in full at your next statement date.
Ultimately though, the right travel credit card used in the right way, tends to be the most cost-effective way to spend while abroad.
And while the primary purpose of an overseas credit card is for spending or withdrawing cash overseas, it can still be used as normal back in the UK if you wish.
Other reasons to use a travel credit card
There are several other advantages to using a travel credit card, too. These include the following:
- purchase protection: Purchases made on a credit card, providing they cost over £100 and up to £30,000, are protected by Section 75 of the Consumer Credit Act even when made abroad. This means if what you purchased is faulty, or the company goes bust, the card provider is equally responsible alongside the retailer to provide a refund
- competitive exchange rates: Travel credit cards can offer competitive exchange rates when spending overseas
- cashback and rewards: Some travel credit cards also offer cashback and other incentives such as family travel insurance.
What should I watch out for?
If you are considering applying for a travel credit card, there are also a number of points to be aware of:
- interest rates: As a rule, travel credit cards don’t offer 0% introductory deals, which means you’ll usually have to pay interest if you are unable to clear your balance in full each month. The APRs advertised are only representative too. This means you could be offered a much higher APR depending on your credit score and personal circumstances. You may even be turned down altogether
- fees: Although travel credit cards are cheaper than standard credit cards when spending overseas, watch out for annual or monthly fees. You may also be charged if you are late with a monthly payment or miss one altogether
- dynamic currency conversion: When you pay for a purchase in a shop, the retailer may convert your payment into pounds rather than keeping it in the local currency. Unfortunately, the exchange rates applied usually offer poor value when this happens so you could pay more for your purchase than expected. If you’re given the option, always pay in the local currency.
What alternatives are there?
If your application for a travel credit card is not accepted, you have left it too late to apply, or you would just sooner choose a different way to spend, there are other options.
Choosing to pay by debit card, for example, means you won’t be borrowing on credit so there’s no prospect of paying interest (unless you are in your overdraft). However, to get hold of a debit card with low or no fees for use abroad might mean switching your current account provider. If you’re a regular traveller overseas it could pay off to seek out the best debit cards for overseas use.
Alternatively, you could consider a prepaid currency card that enables you to load up your card with foreign currency in advance. If you spend what’s on the card, you simply top up again. Many of these cards are cheaper than standard credit cards and offer competitive exchange rates.
You might also want to take some foreign currency with you as cash for times you can’t use plastic. Order it online in advance to get the best rates and carry it safely.
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