How to use a credit card overseas

Step-by-step guide to using your credit card abroad

Follow these simple steps to get the best out of your credit card abroad and make sure you don’t pay penalty fees.

1. Choose a specialist travel credit card for fee-free overseas spending

Before you go, see if you could benefit from a type of credit card designed for everyday spending overseas. Known as specialist travel credit cards, these typically give you: 

• Fee-free spending abroad
• Competitive exchange rates
• Fraud and purchase protection for anything you buy which costs between £100 and £30,000, covering you as if you were in the UK.

You can use our eligibility checker to see which cards you’re likely to be accepted for, without harming your credit score.

Check your eligibility

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.

2. Check your card is in good shape for its travels

If you’re going to rely on your card for spending, make sure it’s ready – and physically able – to go. Double-check there’s plenty of time left before it’s due to expire (not an issue if you’ve got a new specialist card, of course) and make sure you know its pin. This is vital if you have lots of other cards and it’s been months since you last used the one you’re taking with you. 

If it’s been a long time – at least a year, say – and the plastic looks worn and well-loved, test it out to make sure the chip still works.

3. Tell your bank you’re going away

To protect you, banks have robust fraud systems in place which keep an eye out for any unusual spending on your card. Suspicious activity – such as foreign payments flashing up when you’re normally based in the UK – can be a sign to your provider that your accounts have been compromised.

This is why it’s key to let your card provider know about your travel plans. While it may not always stop your card being frozen, it can help keep problems to a minimum. After all, who wouldn’t rather enjoy their trip than spend time frantically trying to unblock their account? You can usually share the timing of your overseas trip with your bank via its app, online or by phone.  

4. Stay on top of your spending with online alerts

It can be all too easy to lose track of how much you’re putting on your card when you’re having fun on holiday or caught up in work. But spend over your card’s agreed credit limit and you’ll usually end up with a penalty – often an ‘overlimit’ fee of £12. Your card could also be declined, your credit score damaged, and any promotional interest rate lost.

To help stay on top of your money overseas, sign up for your lender’s app or online banking service. 

• Most lenders now offer apps where you can usually set up alerts any time your card is used and check your balance. Some will send you a text or email if you’re getting close to your credit limit. Many also include budgeting tools to help with your overall finances.
• If your card provider doesn’t yet have a dedicated app, you should still have the option of online banking through its website. Your smartphone’s 4G or 5G network signal has built-in security, but if you use WiFi to log on instead, make sure it’s a secure link.

5. Keep up repayments on your card

You may be on a well-deserved break but your money will still be working. So make sure you’ve set up payments to cover your card bill if it lands while you’re away. Missing a payment can also lead to a £12 late payment fee. And, similar to any credit limit overspend, it could also cause any promotional deals to end and harm your credit score.

Setting up a direct debit means you don’t have to worry about missing any payments and can get on with enjoying your trip. 

• As a bare minimum, you should be set up to pay the minimum amount by direct debit each month
• If you’re not on a 0% interest rate deal, you’ll need to clear the whole balance each month if you want to avoid interest charges.

6. Pay in the local currency 

Whenever it’s time to pull out your credit card overseas – in store, at a restaurant or by an ATM for example – you'll be given a choice of how you pay. Faced with a bill in either the local currency or ‘pounds sterling’ (it might also show as GBP£), pick the currency of the country where you’re staying. 

Why? Your own card company will do the exchange rate conversion for you, and it‘s usually at a cheaper rate which saves you money. This is especially the case if you carry one of the specialist travel cards which tend to offer very favourable exchange rates on top of fee-free spending. Simples! 

7. Try to avoid withdrawing cash 

Taking out cash from an overseas ATM with your credit card can be very costly. You face a withdrawal fee plus interest charged from the moment you pull the notes from the dispenser.

To avoid being stung with these cash advance fees, plan as far ahead as you can and order the relevant foreign currency before you leave the UK. You’ll find plenty of online currency brokers and bank services to compare currency rates, as well as in your local bureau de change. 

It’s worth noting that, just like in the UK, using a credit card to get cash from an ATM abroad will register on your credit file. As a one-off, it shouldn’t do you any harm. But steer clear if your credit history isn’t the healthiest or you’re intending to apply for a loan or mortgage in the near future.

Alternatives to using a credit card abroad

It’s good sense to keep all your spending options open if you’re planning to travel abroad. Aside from a travel credit card, you could also use:

• Prepaid travel cards – load these with your chosen currency at a fixed exchange rate before you travel. They're usually easy to top up and manage online, and help you budget as you can’t overspend your balance.
• Debit cards – some UK banks, such as Starling and Monzo, offer fee-free spending abroad. You may even be able to withdraw cash up to a certain limit with no fees. Just be mindful that you have less buying protection on more expensive items than you get with a credit card.
• Cash – bringing some local currency for small purchases can be useful and practical for emergencies. But be mindful that carrying around large amounts of cash may not be safe. Make sure you also have decent travel insurance in place to cover you if your cash is stolen.

For a more in-depth look at your options when spending abroad, head to our guide on cheap travel money tips.