Using debit or credit cards abroad, advice please!

[Howardh]

Only ever used a credit card abroad to pay for a hotel; otherwise I've always used cash.

With the reduction in exchange bureaus here (due to covid) and how easy it is to uses contatless abroad, thinking of using my cards more than cash now. However, as a relative newbie, got a couple of questions (debit is visa, credit mastercard) which will provide the lesser fees, and should I buy in local currency (euros) or pounds? Think the answer to the latter is local currency, but please confirm!

Also I understand there are specific travel debit or credit cards, has anyone experience of these good/bad??

Trawling the web for information is confusing me more!! I'd no idea how travellers cheques worked either...never used them!! Thanks everyone!!

 

[Bletchleyite]

Contact your bank regarding international fees, they vary by card and there isn't a hard and fast rule by card type.

Travellers cheques are no longer really a thing. They've been replaced by the pre-pay cards you mention - you load money on them and spend/withdraw it abroad. Check the fees as again they vary.

 

[Howardh]

Contact your bank regarding international fees, they vary by card and there isn't a hard and fast rule by card type.

Travellers cheques are no longer really a thing. They've been replaced by the pre-pay cards you mention - you load money on them and spend/withdraw it abroad. Check the fees as again they vary.

Thanks, no intention of using traveller's cheques!

 

[robvulpes]

Look into setting up a Starling Bank [link] current account, depositing some money in it before you go, and topping up online if you need to while you're away. Fee-free use of their debit card abroad and reasonable exchange rates. In the last couple of years (when travel abroad was still free and easy) I've only used that and cash (the latter taken with me or obtained abroad from an ATM - when the ATM operator may charge a fee).

 

[Domh245]

they vary by card and there isn't a hard and fast rule by card type.

My experience is that debit cards generally do have a fee, whilst credit cards don't!

As for the specific travel cards, there are some credit cards that are specifically advertised as "travel credit cards" and will charge no foreign transaction fees, but there are other cards which also have zero foreign transaction fees (as well as additional perks such as cashback) - check the details closely! The only other thing to add is that the exchange rate depends on the card issuer - mastercard tend to be slightly better, but there usually isn't anything in it, certainly nothing to worry about unless you are spending thousands! As usual with anything financial, it's probably worth a read of MoneySavingExpert's page on the matter!

 

[Bletchleyite]

My experience is that debit cards generally do have a fee, whilst credit cards don't!

It seems more common for debit cards to have a flat fee but use the Bank of England rate, and for credit cards to not have a flat fee but either a percentage or a bad exchange rate. Not universal, though; Monzo for instance is a debit card but does not charge a flat fee (nothing at all up to £200 in a certain period I think but may be wrong). Almost nobody charges you nowt (i.e. just uses bank rate) but some do so if you do a lot of travel they are worth seeking out!

Generally, the former is better for you if making few, more expensive purchases, and the latter if making smaller ones.

 

[Howardh]

Looked at my bank's site and the charge per transaction is around 2.5% (a lot more for using an ATM) and as long as it's paid back (it will be) then that's it as far as charges go. BUT no mention of currency exchange fees which could be quite a sting, and you have to use their rates. Which is why I'm wanting advice.

Can I get a credit card with no fees for either the transaction or the exchange? I've looked at Barclaycard for travel but I'm afraid I can't find currency exchange rates (there are no transaction fees though).

I'll probably still take mostly cash but use a c/c for one or two expensive purchases, such as a ferry ride, and take note of the charges on return. Of course, there's the slight issue of getting abroad right now!!

 

[cactustwirly]

Use a Revolut/Monzo card which are cash cards which you top up and spend like a normal card, ATM withdrawals and spendiing are free, and at the interbank rate.
There's also the Halifax Clarity Credit card, which also has no fees, this has a slightly better rate than the former.

Do not use your normal debit card!!! You will get hammered with the fees.

 

[Bletchleyite]

Monzo is a full bank account these days (though you can use it in that way, it's my main bank and I think it's great).

There is a cap on the amount per month though, may only apply to cash or may apply to foreign transactions too, I'm not sure.

 

[Bletchleyite]

Looked at my bank's site and the charge per transaction is around 2.5% (a lot more for using an ATM) and as long as it's paid back (it will be) then that's it as far as charges go. BUT no mention of currency exchange fees which could be quite a sting, and you have to use their rates. Which is why I'm wanting advice.

It really does vary by bank. Does Moneysavingexpert perhaps have a table?

 

[Howardh]

Use a Revolut/Monzo card which are cash cards which you top up and spend like a normal card, ATM withdrawals and spendiing are free, and at the interbank rate.
There's also the Halifax Clarity Credit card, which also has no fees, this has a slightly better rate than the former.

Do not use your normal debit card!!! You will get hammered with the fees.

Thanks, I'll look into that. Thanks everyone for the advice on a debit card; looks like that stays at home!!!

 

[Howardh]

It really does vary by bank. Does Moneysavingexpert perhaps have a table?

They did (I googled it) but didn't really help. They did link to Barclaycard and suggesterd some others, as I alluded to I get they have no transaction fees, but what about the "commission" for exchanging euros to pounds?

I am learnign stuff though;
1. Don't use debit card
2. there are specific c/c's for travel around

 

[cactustwirly]

Thanks, I'll look into that. Thanks everyone for the advice on a debit card; looks like that stays at home!!!

It's worth taking in case of emergencies, and you can't pay by other means.

 

[SuspectUsual]

I’ve got a Halifax mastercard that I got specifically for holidays abroad - no transaction or exchange rate fees. Pretty sure they market it as Clarity.

Last time I went abroad was two years ago to America, and virtually nobody offered contactless then (and that was in New York, Philly, Washington etc not hick towns in ‘Bama).

The hardest part was buying petrol - nearly all the pumps are self service (like pay at the pump over here) but require a zip code as well as the PIN for authorisation, which obviously caused no end of problems

 

[Howardh]

This is the page of charges on my bank's c/c site; seems to be that there's no currency exchange fee (that there is with my debit card and direct transfers)

Original transaction	€100
Payment scheme exchange rate	1.113654
Conversion to pounds	£89.79
Foreign currency transaction fee	£2.65 (2.95%)
Final statement amount	£92.44

 

[Howardh]

I’ve got a Halifax mastercard that I got specifically for holidays abroad - no transaction or exchange rate fees. Pretty sure they market it as Clarity.

Last time I went abroad was two years ago to America, and virtually nobody offered contactless then (and that was in New York, Philly, Washington etc not hick towns in ‘Bama).

The hardest part was buying petrol - nearly all the pumps are self service (like pay at the pump over here) but require a zip code as well as the PIN for authorisation, which obviously caused no end of problems

Halifax - I'll look in to that. thanks!

**Edit - just cheacked and despite being a self-funder (sometimes an issue) I'm accepted! Might get one tomorrow. Halifax is part of my bank's group, so I'm surprised lloyds son't offer a similar card.

Thanks all!!

 

[dgl]

For nationwide flex account holders it's 2% fee with them using whatever Visa Europe's exchange rate is on the day, which is usually pretty much the same as the Bank of England rate.
Note that supposedly 2% is what Visa charge Nationwide for the currency conversion and used to absorb it but decided it was uneconomical to continue doing so.

 

[jfollows]

should I buy in local currency (euros) or pounds? Think the answer to the latter is local currency, but please confirm!

Local currency, yes, always.
Watch out for two things here - firstly if you use an ATM to extract cash, read what it's saying carefully, the ones I've used try to trick you into using their rubbish sterling exchange rate to the extent of being counter-intuitive and confusing, you have to answer "no" to at least one of the prompts to get what you want. Secondly, in shops, the retailers get paid a commission to entice you into using sterling for the transaction, also at a rubbish exchange rate, and the less scrupulous of them don't even ask you but present you with a terminal for your PIN with the sterling option already selected.

EDIT: Reason being, as you have probably gathered, is that whatever credit card or debit card you're using, assuming it's being billed back to you in sterling, the exchange rate and fees imposed by your bank for the conversion will be at a better rate than the one offered you on the spot by the ATM or retailer. Even the "worst" type of card will offer a better rate, and there's good advice already here on cards which offer better rates and lower fees.

 

[superjohn]

It's worth taking in case of emergencies, and you can't pay by other means.

I concur, it is essential to have back up options even if they would be more expensive to use. When the banks have their occasional IT meltdowns I am always amazed by the number of people who turn up bleating in the media because they went abroad with one card between a family of five!

For all but the shortest of trips I generally take a reasonable amount of emergency cash in sterling. If an emergency arises I can change it while I’m there and take the hit, if it doesn’t I just bring it back and am no worse off. In Europe I base the amount on the cost of walk up tickets to get me home at short notice.

I bank with Halifax and have a Clarity card which I use abroad with no fees. The last time I used my regular debit card abroad the £36.55 transaction attracted two separate fees of £1.09 and £0.50. These fees soon mount up if you are using the card frequently.

 

[thejuggler]

I have Santander zero credit card which as the name suggests is zero foreign fees.

We were in Italy last year and contactless was a mystery to some. They entered the amount in the machine which accepted contactless, but a few shopowners looked in bewilderment when I used the system.
Never accept dynamic currency exchange. Always pay in local currency.

 

[Howardh]

Thanks all. There are many youtube videos explaining how many exchange atm*s are ripoffs, I would only use those by a bank.

 

[superjohn]

Out of interest, where are you actually going? Attitudes to cards can vary greatly even between adjacent countries. The Netherlands are increasingly cashless but next door Germany is still very much cash based. The situation is improving, especially with self service tills and ticket machines, but cash is still required particularly for small sums. For example, the DB museum wouldn’t accept my card for the entry fee last year.

 

[Bletchleyite]

Thanks all. There are many youtube videos explaining how many exchange atm*s are ripoffs, I would only use those by a bank.

This does actually vary a bit. The "Raphaels Bank" ones you get at airports won't charge you a fee (or didn't, anyway) if you choose a Euro withdrawal billed in Euro, your card handles it.

 

[Belperpete]

Warn your card provider before you go abroad of where you are going. If they notice any unusual spending pattern, they may stop the card. Especially if they are unable to contact you to verify the transaction.

 

[philjo]

The Nationwide credit card does not have fees for normal spending in Europe. I found this to be the best card to use for normal purchases last year. But obviously not for cash withdrawals. The card worked contactless at retailers in Amsterdam.
Always do the transaction in the local currency as the exchange rate given by the card provider will be better than the retailer!
Avoid TSB cards - their fees are expensive !
In Slovenia I found some ATMs would not accept certain debit cards, but the nationwide and HSBC Debit cards worked.

 

[Bletchleyite]

The main UK card that caused problems abroad was UK Maestro which was still running on the old Switch system and not the proper Maestro system so didn't work in a number of places. However I don't think anyone still issues those, they instead issue MasterCard Debit cards which run via the MasterCard credit card processing system and so work much more widely. VISA debit cards (other than I think V-Pay which you don't get in the UK) have always run via VISA's credit card processing system so never suffered that issue.

 

[JamesT]

If you're frequently going abroad, you may want to consider the nationwide flexplus current account. It's £13/month, but bundles in various insurance products as well as having no charges on being used abroad.

 

[ainsworth74]

Halifax - I'll look in to that. thanks!

**Edit - just cheacked and despite being a self-funder (sometimes an issue) I'm accepted! Might get one tomorrow. Halifax is part of my bank's group, so I'm surprised lloyds son't offer a similar card.

Thanks all!!

I've been using a Halifax Clarity card and would recommend it. I've never encountered any unexpected fees using it and the exchange rate always seems to be close to perfect. Only thing to remember is to make sure you are paying in the currency of the country you're in rather than pounds (many machines seem to offer the choice) otherwise you'll be paying whatever exchange rate the card machine operator comes up with and they're usually not very favourable!!

 

[Hadders]

I've got a Nationwide Credit Card and use it when travelling in Europe (as well as in the UK). The exchange rate is normally better than I'd get at a currency exchange.

I buy as much as possible on my credit card, and just pay the bill at the end of the month. I always take some Euros with me when travelling in the eurozone, mainly for emergency use or for places where I can't use my credit card. I never bother to change Euros back into Sterling as I travel reasonably frequently.

I wouldn't normally use my debit card abroad as the fees are too high.

 

[yorkie]

I also use a Halifax Clarity card.

... how easy it is to uses contactless abroad....

That really depends! I've been to really popular restaurants in Germany that have been cash only, yet in the Netherlands I doubt there is anywhere of any significance that wouldn't accept contactless.