The cost of exchanging pounds into foreign currency or withdrawing cash when overseas can often add extra costs to an already spendy holiday.
So, it’s wise before you travel to look into the best spending options to help you avoid high transaction fees and get the best rate on your foreign exchange.
And if you can get some added perks – all the better!
Credit cards are considered by most experts to be the best solution for ticking these boxes. But which card should you choose and which brands offer the best deals?
Here’s a round up of what features you should look for in the credit card you use on holiday and which brands offer the best solutions.
Why a credit card is a smart solution for holidaymakers
If you use credit card correctly and avoid the common mistakes they can actually help you save money. You should pay the full balance off every month and spend below your limit.
As long as you are sensible you can reap some rewards which will help reduce your holiday costs.
Here are some of the advantages:
No foreign transaction fees
If you choose a credit card which does not have foreign transaction fees you can make savings each time you spend as you will not pay additional charges. These can amount to 2% or even 3% so this is a helpful money-saving feature to look out for.
Better exchange rates
As well as fees, there is also the matter of exchange rates. What you get when you buy your foreign currency in the UK is one thing but withdrawing cash and using your debit card abroad involves a process of exchange too.
Using one credit card which defines its exchange rate from the outset means you will know where you and, according to MoneySuperMarket, cards tend to offer better rates.
Rewards and cashback
As an added bonus, a number of credit cards offer rewards, cashback or travel miles for every pound you spend. This could help offset future holiday costs.
Travel perks
Some credit cards, MoneySuperMarket revealed, have travel benefits including airport lounge access, priority boarding, free travel insurance and purchase protection. Some also offer emergency assistance including 24/7 customer support for lost cards, fraud protection, and help with travel related issues. This is handy for frequent travellers.
Kara Gammell, personal finance expert at MoneySuperMarket, said: Look for credit cards that offer no foreign transaction fees, so you can avoid extra charges every time you make a purchase abroad.
“It’s also a good idea to choose cards that offer rewards on travel spending – think cashback, travel miles, or points that can be redeemed for future trips.
“And don’t forget to check if the card includes complimentary travel insurance, which can save you money and provide peace of mind for things like cancellations, lost baggage, or medical emergencies while you’re away.”
Gammell recommended the following card for those looking for a credit card which offered the rates and perks for travellers.
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Halifax Clarity Credit Card
This is Gammell’s top choice for those who don’t want to pay foreign transaction fees.
“This card has become a favourite for travellers due to its lack of foreign transaction fees and free cash withdrawals,” she said, “making it ideal for purchases abroad.
“Plus, it offers competitive exchange rates, ensuring you get the most value for money overseas.”
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Barclaycard Rewards Card
If you want earn rewards, this is the card for you, said Gammell. “This card offers cashback on all purchases, including travel spending,” she added. “It’s perfect for holidaymakers who want to make the most of their expenses and earn something back at the same time.”
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American Express Platinum Card
Looking for luxury travel perks? Choose this card. Gammell said: “If you’re looking for exclusive travel benefits, the American Express Platinum Card offers a host of perks such as access to over 1,400 airport lounges worldwide, comprehensive travel insurance, hotel benefits, and much more.
“Though there’s a high annual fee of £650, frequent travellers may feel that they’ll get great value in return.”
