Heading overseas this summer? Here's how to make sure you get the most bang for your buck – or whatever currency you find yourself using.
Plastic is fantastic for foreign trips – not least because it saves you carrying wads of cash around. But the charges associated with using a card overseas can soon make it an expensive luxury.
So it's important to check how much it will cost you to use your existing plastic card when overseas.
The costs can soon mount up. Most cards charge fees if you use them abroad – and a 2.99% 'foreign load fee' is typical.
That means you pay £2.99 in fees for every £100 you spend.
And you'll normally have to pay for the privilege of using a cash machine while you're in a foreign country. Once more, 2.99% is not uncommon.
And if you use a credit card to withdraw cash overseas, you'll probably be charged interest on the amount withdrawn as soon as the cash emerges from the machine.
And that's the case even if you clear your balance in full before the due date.
Typically charged at an interest rate the wrong side of 25% APR, this sort of 'cash advance' can leave you staring in helpless dismay when you get back to Blightly and open your next statement.
Low-cost overseas use cards
If the card you have at the moment levies these sorts of charges – and the info should be on your statement – then it could be well worth checking out credit cards are designed specifically for low-cost overseas use.
For example, the MBNA Everyday Plus American Express credit card, has no charges for use anywhere in the world – no fees on spending, and no fees for making cash withdrawals.
But if you do make a cash withdrawal, you'll still be charged interest on that money as soon as you take it out. Even here, though, the MBNA card is attractive, with a relatively low rate of 7.4% pa (variable) on cash withdrawals, purchases, balance transfers and money transfers.
The card has a representative rate of 7.4% APR (variable)*.
Another card to consider for overseas use is the Halifax Clarity Card, which doesn't charge for foreign transactions or cash withdrawals. It charges an interest at a rate of 18.95% pa (variable) on cash withdrawals).
The card has a representative rate of 18.9% APR (variable)**.
Tip: Going abroad this summer? Apply for your overseas credit card now as it usually takes a couple of weeks for you to receive your card once you have been accepted. If you're unsure whether or not you are likely to be accepted for a credit card, use the MoneySuperMarket Smart Search tool first.
An alternative to a credit card for overseas usage is a prepaid card. Here, you 'load' the card in advance with a chosen amount of whatever currency you need.
You then use the card in the same way as any other plastic – but you can only spend what's on the card.
You can top them up with further funds as and when you need to. But they can help you ration your spending if you're on a budget. An added benefit is that, if your card is stolen, only the amount on the card can be spent.
Card are available in sterling, euro or dollar denominations. If you load your card with sterling, your money will be exchanged to the local currency if you use your card overseas.
While the fees for these cards are usually lower than for credit or debit cards, it's still worth tracking down competitive deals.
With the Euro card and US Dollar card from FairFX, you won't be charged when you spend abroad but there is a €1.50/$2 fee for ATM withdrawals.
You can load sterling onto the FairFX Anywhere card but there is a 1.4% charge when it is used for purchases outside the UK, as well as a £1.50 fee for cash withdrawals.
With prepaid cards you sometimes have to pay an application fee. But the FairFX cards are free if you load £50 or more on to the card (below £50 you pay £9.95).
At the moment, new customers applying for either the FairFX Euro or US Dollar card through MoneySuperMarket will receive an extra £8 when they load £300 or more, or an extra £20 when loading £600 or more.
With the Anywhere card, applicants will receive an extra £5 when loading £500 or more, or an extra £26 when loading £1,000 or more. T&Cs apply.
Caxton FX offers a Euro Currency Card, a US Dollar Currency Card and a Multi-Currency Card. Here, there are no foreign transaction fees (if you use them in the country that matches the currency) but there is a 2.49% fee for the Multi-Currency card if you use it outside the UK.
There are also no cash withdrawal fees if you use them in the correct currency.
New customers applying through MoneySuperMarket will also receive £20 extra when loading the equivalent of £600 or more in any currency. T&Cs apply.
You can compare a wide range of prepaid cards here, remember to keep an eye out for application fees, loading fees and inactivity fees.
When travelling overseas it's worth taking some foreign currency, Just try to avoid buying your foreign currency at the airport as you'll pay inflated exchange rates and commissions compared to other options.
These include ordering your currency over the internet for delivery to your home if you need it, or for collection from a bureau.
*Representative example: If you spend £1,200 at a purchase interest rate of 7.4% pa (variable) your representative rate will be 7.4% APR (variable).
**Representative example: If you spend £1,200 at a purchase interest rate of 18.95% pa (variable) your representative rate will be 18.9% APR (variable).
All credit cards are subject to status and terms and conditions. Over 18s, UK residents only. Terms and conditions apply. See MoneySuperMarket.com for further information.