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What to know before using your card overseas

Holidays are a time to relax, but choosing the right card to take can make things stressful.

When travelling abroad, using a credit card can be one of the most affordable ways to make purchases, and using a debit card is typically the only practical and affordable option for withdrawing cash.

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Looking for a travel credit card? Compare travel cards to avoid unnecessary fees overseas.

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However, if you don’t have a suitable card to use, you could find yourself paying excessively high fees.

If you don’t want to risk coming back to some unpleasant surprises on your next credit or debit card statement, you should consider contacting your bank to find out more about their fees for transactions and withdrawals in foreign countries.

Alternatively, you may want to consider getting a more travel-friendly solution before setting off.

Fees and charges when using your card overseas

Using a credit or debit card abroad will be subject to various fees and charges:

Exchange rates

Exchange rates vary slightly depending on the particular provider of the credit or debit card.

Every bank sets its own exchange rate with some being considerably more favourable than others.

Do not simply take for granted the exchange rates which you see online, since these are normally the best possible rates available, and they typically only apply to major international corporate transactions. Consumers always have a slightly worse exchange rate.

What to know before using your card overseas

Foreign usage fees

Foreign usage fees are typically added to the value of every purchase you make using your debit or credit card when abroad.

On top of the exchange rate, they will usually add an additional fee which can be anything up to three percent.

Cash withdrawal fees

Cash withdrawal fees apply with most debit and credit cards, although there are some exceptions.

When withdrawing money on your card, you will usually have to pay an additional 2-3 percent on top of the value of the money withdrawn.

This can also stack with the foreign usage fee, making withdrawing money on certain cards particularly uneconomical. It is highly advisable to avoid using your credit card to withdraw money, either abroad or at home.

Flat fees

Flat fees may be charged in addition to those mentioned above whenever you use the card abroad, whether it is to withdraw money or make a purchase.

Flat fees are typically around two pounds. It is always more economical to withdraw large amounts of cash at once if you have to pay a flat fee each time you take out money.

Tips for travel credit cards

The Internet should be the first place to start looking for travel-friendly credit or debit cards. Using financial comparison services like uSwitch you can hunt down the best deals by comparing them side-by-side.

Using your card abroad presents an increased risk, and if you do not take the necessary precautions before setting off, you may find that your card gets automatically blocked the first time you try to use it to make a transaction in a foreign country.

Take abroad only the cards which you intend to use, and leave any others at home.

Contact your card provider and tell them that you intend to use the card abroad, otherwise they might block it automatically when they see what appears to be a suspicious foreign transaction.

You should also make a note of the emergency phone numbers to call for each card you are taking with you. If your card gets lost or stolen, the first thing you will need to do is alert your bank in order to cancel the card.

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