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.
Following new restrictions implemented on 5 January 2021, you can only travel internationally or within the UK if you're legally permitted to do so while the UK is under full lockdown restrictions.
The Foreign, Commonwealth & Development Office (FCDO), currently advises British nationals against all but essential international travel. See latest FCDO advice for further information.
Any insurance policy purchased to cover a trip to a destination where the local authority, or the FCDO, has instructed citizens not to travel, will not be valid.
For more information, please see our coronavirus and travel insurance page.
Until then, stay safe.
Why get a travel credit card?
Travel credit cards could save you money while you’re away on holiday. They typically cost less to use when you’re paying for things abroad – and come with other benefits too.
- It can be a useful backup in an emergency if you lose your cash or debit card.
- Credit cards can give you protection from identity theft, so you won't be liable for any illegal spending if your card details are stolen and used. You’ll be able to cancel your card as soon as you find out it’s missing.
- Travel credit cards can give you cashback on spending as well as commission-free purchases while you’re abroad.
- You might need a credit card to pay in some hotels and car hire companies.
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.
Can I withdraw cash with a travel credit card?
Yes, you can withdraw cash with a travel credit card, but it’s not recommended because it’s expensive.
If you do withdraw cash abroad, you’re likely to be asked whether you want local currency or sterling. Always pick the local currency as there are high fees for converting to sterling.
How much does it cost to use a regular credit card abroad?
Exactly how much it costs to use a regular credit card abroad depends on the card, but typically two types of fees are included: 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 (although the latter isn’t recommended as it can be expensive). 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.
What are the alternatives to a travel credit card?
Spending options abroad 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: There may be fees for using your debit card abroad, and you may be charged foreign currency fees and fees for withdrawing cash.
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 mean being charged fees, something you could avoid with a travel credit card.
So a travel credit card could be a better option when travelling abroad, but it’s important to weigh up the benefits against your personal circumstances.
“A travel credit card has saved me from extortionate fees”
Adventure travel blogger Lucy Ruthnum said: "When I first started travelling full time, I didn't have a credit card, I didn't know enough about them to feel confident with one. But after months of travelling around Asia unknowingly being charged extortionate fees and repeatedly finding my account blocked because of 'suspicious use', even when I had always notified my bank where I was, I realised how important it was to be on top of your finances when abroad.
“When your cash is all in the wrong currency - and Thai immigration won't accept your one bank card – so you end up chasing after a taxi to find the nearest ATM so you don't miss your boat – you start to realise there must be a better way of doing things.
“Once back in the UK I changed banks and made sure I had all online banking with instant online access to advisors and the power to block/unblock my own cards if they go missing. I now keep my money spread across three accounts – including current accounts with two separate banks.
“I also took out a credit card that is top-rated for overseas spending. It doesn't charge exchange fees on using your card, or withdrawing money abroad, and you don't get charged interest when you use your card abroad."
UK residents’ spending habits abroad
UK residents spent £62.3billion** abroad in 2019
- that’s £62,300,000,000**.
Of all the trips taken in 2019 by UK residents:
Holidays accounted for 58.7 million trips**
Visiting friends or relatives 23.5 million**
Business trips for 9 million**
**Data from Office for National Statistics
Countries most visited by UK residents
UK residents visited Spain the most in 2019, followed by France, Italy and the US.
Top ten countries visited by UK residents, 2019
Source: Office for National Statistics - International Passenger Survey
Countries where card payments are more common than cash
Like the UK, more and more countries are becoming better set up for cashless payments and, in some, cash is used less than digital and card payments.
The coronavirus outbreak accelerated this trend, with some businesses asking for card or digital payments to avoid handling notes and coins.
Among the most cashless societies in the world are:
- China: Cashless payments via smartphone apps are increasingly commonplace in China, although credit cards aren’t always accepted in rural areas.
The UK Foreign Office warns that counterfeit bank notes are increasingly common, even from ATMs, and banks will not replace forgeries.
- Finland: Cashless payments account for more than three quarters of payments made in Finland***
- South Korea: About 80% of transactions in South Korea are cashless. Payment apps are popular and Visa and Mastercard credit cards are widely accepted.
- Sweden: Cash is increasingly rare in Sweden. Four out of five purchases in the country are made electronically. Even children use debit cards. Smartphone apps are used alongside cards.
- Australia: Has a set up much like the UK in terms of payment with mobile app, credit and debit card and cash payments all widely accepted.
Did you know?
How things are done in Japan
As many as 30,000 Brits a month travel to Japan
a country that's rising in popularity thanks to attractions including the forthcoming Olympic Games.
But visiting Brits might be surprised about the way payments are made in Japan. It’s still a mainly cash-based society and Maestro, Link and Delta cash cards are not widely accepted.
And you won’t usually find ATMs in the street in Japan, but in 7-Eleven convenience stores, post offices and JP Post Banks.
Contactless card payment limits across the world
Contactless card payments, which you can make with travel credit cards, let you pay for things without entering a PIN.
The contactless payment limit was increased in many countries in 2020 in response to the COVID-19 pandemic, although European regulations set a maximum limit of EUR 50. The aim was to help people avoid spreading germs by reducing the need to touch a keypad.
Contactless payments made with mobile phone apps usually have higher limits or no limit, but you may have to pay roaming charges for using your mobile.
Limits can vary between retailers. For more expensive purchases it’s still possible to use a card, but you’ll need to put in your PIN.
A Visa spokesperson said: “We know consumers want to use touch-free payments for everyday purchases. Raising the contactless limit allows them to do that more easily and securely and reduce the need to enter their PIN.
“Contactless payments is one of the easiest ways to pay. With contactless payments available across Europe, consumers can simply tap to pay with a card or mobile phone for even more purchases.”
|Country||Contactless card limit in local currency (without need to enter a PIN)||Estimated value in pounds GBP/£****|
|UK||GBP 45||GBP 45|
|Spain||EUR 50||GBP 45|
|France||EUR 50||GBP 45|
|Italy||EUR 50||GBP 45|
|Ireland||EUR 50||GBP 45|
|Netherlands||EUR 50||GBP 45|
|Greece||EUR 50||GBP 45|
|Germany||EUR 50||GBP 45|
|Portugal||EUR 50||GBP 45|
|Poland||PLN 100||GBP 20|
|Turkey||250 TL||GBP 25|
|Australia||AUS 200||GBP 110|
|Canada||CAD 250||GBP 145|
|New Zealand||NZD 200||GBP 102|
|UAE||AED 500||GBP 105|
****Amounts and exchange rate correct as per 1 October 2020.
"A second travel bank card saved us after theft or belongings"
Ellie Roddy said: “When my boyfriend and I visited Barcelona our bag was stolen from the beach with two bank cards inside.
“To begin with we were really worried but we phoned up straight away and were able to easily cancel both cards. We were able to transfer money from the stolen debit card to another card that we had left in the room, so we didn’t have to struggle financially during the rest of our trip.
“We ordered new ones at the same time and they arrived at our home not long after we did.
“I’m grateful that it was a card that got taken rather than cash, as we wouldn’t have been able to get that back. We can’t avoid taking our cards out with us but I’d definitely recommend that second one – or a credit card - that can be kept safely in the hotel room, in case it is needed.”
Credit card for travel offers
Occasionally credit or debit card providers offer deals with no fees for using the card abroad for a set period of time.
These can be great but don’t forget to take note of when the deal ends so you don’t end up paying expensive fees.
Our comparison tool can show you current offers when you’re looking for a credit card to use abroad.
The best credit card for you will depend on your circumstances.
Switching to a credit card could save millions of people money
- 70%***** of UK adults have a credit card, but almost half (around 17 million) of credit card holders have never switched provider, leaving many paying higher interest rates as a result.
- One in ten haven’t switched credit card out of concern they won’t get accepted by another provider.
An eligibility tool like Compare the Market’s lets you check what cards you’re likely to be accepted for without risking a formal application being declined or impacting your credit score.
- 80% of people have never used an ‘soft checker’ eligibility tool to find out if they’re likely to be accepted for a credit card without a formal application.
*****Figures according to Compare the Market research.
A travel credit card may be cheaper than using your overdraft
Holidays and trips abroad can put the squeeze on finances, causing people to dip into their overdrafts.
40%****** of current account holders used their overdraft in the past year and around the same percentage don’t know what their provider’s current overdraft fees are.
Applying for a travel credit card and paying it off in full every month may be a way to avoid fees.
But beware – 39%****** of people don’t pay off their credit card each month and this can lead to high interest payments.
******Figures according to Compare the Market research.
Frequently asked questions
What’s the problem with using a regular debit or credit card abroad?
As well as standard fees and foreign use 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 told your bank that you’ll be abroad your travel credit card shouldn’t get blocked, but occasionally it can still happen because of security measures to protect you from fraud. Your credit card should have an international contact number on the back in case you have trouble using it.
Are my purchases protected when I use a credit card?
In some circumstances, under Section 75 of the Consumer Credit Act, you may be able to claim your money back for purchases you make with your travel credit card if something goes wrong. This protection can apply to purchases valued at between £100 and £30,000. However, this isn’t automatic. It depends on all the relevant facts, including the supplier’s terms and conditions, the Mastercard or Visa scheme rules and the card issuer’s approach.
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.
If your card is lost or stolen abroad it’s vital to let your card issuer know straightaway.
It’s a good idea to make a note of the 24-hour emergency phone number for your card issuer and keep it somewhere safe with your travel documents. You can usually find these quickly online too.
Visa has an app for use abroad to get help if your card is lost or stolen.
It also has a list of emergency numbers to contact if your card is lost or stolen.
Mastercard also has a list of global emergency contacts.
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.