Travel credit cards
- Find the right credit card for your abroad spending needs – without harming your credit score
- Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December.
What is a travel credit card?
Travel credit cards are designed specifically for use while you’re travelling or on holiday. They are an alternative to regular credit cards, prepaid travel cards and withdrawing cash while you’re abroad.
CORONAVIRUS UPDATE
Unfortunately, due to the outbreak of coronavirus (COVID-19), some providers have decided to temporarily stop offering credit cards through Compare the Market. As a result, we'll only be able to show you credit cards from providers still available, meaning you may see a reduced number of cards on our panel.
We understand that the outbreak of coronavirus (COVID-19) has caused financial difficulty for some of you. If you have a credit card and you’re worried about making repayments due to coronavirus, we’re here to help you understand the options available.
How do travel credit cards work?
Travel credit cards usually have low or no fees when you use them abroad and may use favourable exchange rates, unlike other credit cards.
What are the options for spending abroad?
When you’re abroad, your spending options include cash, prepaid cards, debit cards and credit cards.
Cash: You might think it’s the easier option, but not everyone feels comfortable travelling with a large amount of cash – and there’s always the chance you could lose it or have it stolen.
Debit cards: Using your debit card abroad can result in fees and you may be charged foreign currency fees and fees for cash withdrawal.
Prepaid cards: Some prepaid cards charge an application fee of around £10 and can also charge for withdrawing cash, topping up or getting a replacement card.
Credit cards: Using a regular credit card when abroad can incur fees, something you could avoid with a travel credit card.
While a travel credit card could be a better option when travelling abroad, it’s important to weigh up the benefits against your personal circumstances.
What are the benefits of a travel credit card?
- A travel credit card could offer low non-sterling purchase and transaction fees, as well as low interest rates.
- Using your credit card means you’re protected for any purchases that cost between £100 and £30,000. Under Section 75 of the Consumer Credit Act, if you don’t receive something you’ve paid for, the item was faulty or the company you bought it from goes bust, your credit card provider (along with the retailer) is jointly responsible – so you can get a refund.
- Credit cards come with protection from identity theft, so you won't be liable for any illegal spending in the unfortunate event that your card details are stolen and used. You’ll be able to cancel your card as soon as you’re aware it’s missing.
- A travel credit card can offer cashback on spending and commission-free purchases while abroad.
Can I withdraw cash with a travel credit card?
Yes, you can withdraw cash with a travel credit card. But it’s important to look for a credit card that has a low non-sterling cash fee.
When you withdraw cash abroad, you’re likely to be asked whether to accept the price in the local currency or convert it to sterling. Converting to sterling typically comes with high fees so always opt for the local currency.
How much does it cost to use a regular credit card abroad?
Typical fees when using a regular credit card abroad include non-sterling transaction fees and non-sterling purchase fees.
Non-sterling transaction fees are typically made up of two parts: your payment network (Visa, MasterCard, etc) takes a commission for handling the purchase and your card issuer adds its own fee on top. Card issuers sometimes refer to these as foreign exchange fees.
You’ll be charged a non-sterling transaction fee every time you use your credit card abroad, whether that’s for purchases or withdrawing cash. You’ll also be charged a non-sterling transaction fee if you use your card online and pay in a currency other than sterling.
A non-sterling purchase fee is charged every time you buy something with your card in a foreign currency. With standard credit cards, this can be up to 3% on anything you buy. However, a travel credit card can be a cheaper option as they often have low non-sterling purchase fees or none at all.
Prepaid travel card vs. travel credit card: how do they compare?
With a prepaid travel card, you put the money on the card before you travel and you pay the exchange rate at this time. You can then withdraw the money in cash while you’re away and use your card for some – but not all – shops and services.
With a travel credit card, you’re borrowing against your credit card limit and will need to pay it off after your holiday.
Frequently asked questions
What should I watch out for?
As well as standard fees and foreign usage charges, some credit cards will charge you interest for using your card outside the UK – even if you pay off the balance in full. You might also be charged if you use your credit card to take money out of an ATM.
What exchange rate do I get with a travel credit card?
The exchange rate with travel credit cards is usually very competitive, but check before you travel.
Do I need to let my bank know that I’m travelling abroad?
It’s a good idea to let your bank know or you run the risk of your card being blocked because your provider thinks it’s been stolen. You’ll find you can often report an upcoming holiday via your online banking.
It’s also advisable to note down your bank’s helpline number, just in case you have any problems while you’re away or your card is stolen.
Should I use a travel credit card or withdraw cash when travelling abroad?
When on holiday or travelling abroad, it usually makes sense to use a travel credit card rather than withdrawing cash. This is because there’s a fee each time you withdraw cash from an ATM while you’re abroad.
Should I pay in local currency or sterling when travelling abroad?
When you pay by card abroad, you’re likely to be asked whether to accept the price in the local currency or convert it to sterling. Always pay in the local currency because converting to sterling typically comes with higher fees.
Can my credit card get blocked when spending abroad?
If you’ve informed your bank that you will be abroad, your travel credit card shouldn’t get blocked. Occasionally this can still happen and this relates to the security measures in place to protect you from fraud. Your credit card should have an international contact number on the back in case you have trouble using your card.
How can I ensure credit card security abroad?
It goes without saying that you should keep your credit card safe, whether you’re at home in the UK or overseas. Keep it close and don’t reveal your PIN to anyone – shield the keypad when you’re carrying out a transaction or when you make a withdrawal.
How can I find the best travel credit card for me?
Comparing with Compare the Market makes it easy to search for a travel credit card to suit your needs. If you see a deal that appeals, then simply click to find out more and start comparing travel credit cards today.
