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How to use a credit card abroad

When going on holiday, it might seem convenient to use your credit card wherever you go, but this can quickly lead to fees which can combine to make your trip abroad rather more expensive.

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How to use a credit card abroad

If you are wondering what are the best credit cards for travelling, or you are looking to use a credit card abroad, then read our guide on how to use a credit card for travelling.

When going on holiday, it might seem convenient to use your credit card wherever you go, but if you choose the wrong card this can quickly lead to fees and charges.

In our guide we look at the best credit cards to use abroad and suggest some ways to save money while using a credit card when you are outside the UK.

Compare travel credit cards

Find a credit card with no foreign transaction fees.

What are the best credit cards for travelling?

Whether you are on an extended travel trip or a short break, using the right credit card in the right way can save you a lot of money.

If you go abroad regularly, or if you are planning to use your credit card for the majority of your spending while abroad, you may find that it makes more sense to get a credit card which is specifically tailored to those who want to use it abroad. Many banks offer far more favourable deals than standard credit cards do.

You can shop around for the best credit cards for foreign travel by using our online credit card comparison tool. 

What type of credit card is best for holiday spending?

The best type of credit card for travelling is one that does not charge you a foreign transaction fee. This is a charge on any spending that is not in sterling and can be around 3% of the cost of the goods or services.

Specialist travel credit cards do not charge you to take out cash in another currency using a debit card or make a purchase in a foreign currency using a credit card. This makes it much cheaper for you to eat out, buy goods and services, and withdraw cash when you are outside the UK.

You can find more about the specialist benefits of travel credit cards and shop around for the best credit cards for travelling with our Travel Credit Cards comparison tool.

How can I save money when I use a credit card for travelling?

Credit cards can be a very convenient and safe way of financing your holiday. It is easier and more secure to carry a credit card than a big wad of cash and can be more convenient than having to convert travellers’ cheques.

However, there are a number of ways in which you can rack up extra charges when using a credit card for travelling. Here are the potential ways you can be charged extra fees, and how to avoid them:

Avoid cash withdrawals

Even at home, it is generally not a good idea to use a credit card for withdrawing cash. This is because the lender will usually charge a fee of around £2 to £3 every time you withdraw money. Additionally, cash withdrawals and other types of similar transactions, such as foreign currency purchases, tend to start accruing interest straight away.

Using a credit card to withdraw cash abroad means that you will have to pay these additional charges as well as, in most cases, a foreign transaction fee. The bank's exchange rate will likely not be very favourable either.

In total, you can easily end up spending 10-12% more on the money you withdraw on a credit card while abroad. Instead, it is almost always better to use your debit card to withdraw cash abroad. Just check whether your debit card provider charges an ATM fee for withdrawals made outside the UK.

Shop around for a specialist travel credit card

If you go abroad regularly, you may find that it makes more sense to get a credit card which is specifically tailored to those who want to use it abroad. Many banks offer far more favourable deals than standard credit cards do.

You can compare the different travel credit cards on offer and see which is the best travel credit card for you by using our Travel Credit Cards comparison tool. Some of these cards also offer airline reward points and other travel perks.

Avoid relying solely on your credit card

Although credit cards are more widely accepted around the world than ever before, this is still not the case everywhere you go. For this reason, it is always advisable to exchange some money before you set off, or at least withdraw money on your debit card or convert some cash when you arrive.

You will still need cash in most cases to pay for things like taxis or public transport. On the other hand, make sure that you don't end up leaving the currency conversion too late - converting money in places like airports is usually extremely overpriced.

Inform your credit card provider before you travel

Whether you want to use either a debit or credit card abroad, it is always advisable to alert the provider first. If you do not, they may automatically block your card when they detect it being used abroad. This is done in case the card has been stolen and is being used fraudulently.

To prevent this from happening, and to help ensure that your money and purchases are protected as they would be back home, notify your card issuer that you are going away before setting off.

When you go abroad, be sure to keep a note of the issuer's emergency contact number. You will need this in the event of the card getting lost or stolen, in which case you will need to cancel it as soon as possible.

Always use the local currency when paying

In some places, certain retailers may offer to convert payments to your own currency on the spot. While this might seem convenient at the time, you will invariably end up getting an extremely poor exchange rate.

Instead, insist that everything be charged in the local currency, and let the card issuer handle the currency conversion itself. You will find that the exchange rate is much better this way.

Staying safe while travelling with a credit card

There are a number of options including travellers’ cheques, credit cards, prepaid cards and debit cards that you can use to fund you holiday spending. Cash is a more risky option, as it will be easy to lose. 

Whatever option you choose, make sure that you keep all valuables, including cards and wallet, in your hotel safe whenever you are not using them. If you are using a credit card, choose one that does not make extra charges for using it abroad, and remember to choose the option to pay in the local currency, as you will receive a better foreign exchange rate.

Compare travel credit cards

Find a credit card with no foreign transaction fees.