Travel money: should I get a travel credit card?

The best travel credit card can cut the cost of your holiday spending, but they aren’t for everyone. Get the lowdown with our guide.
Share this guide
woman-cycling-bike

Why do I need a credit card for travel?

Quite simply, you can save a lot of money with a travel credit card. If it’s your main card on holiday, then you can potentially save a fortune in fees. Specialist travel cards do not charge fees for foreign spending, unlike most everyday credit cards.

Over the course of a long holiday, or even a short city break, these fees can make all the difference to your budget. By using your standard credit card overseas, you can potentially open yourself up to a host of unexpected fees.

Most non-specialist credit card providers charge transaction fees, cash withdrawal penalties and even additional interest rates – even if you pay off your balance on time and in full.

If your travel credit card is not your main spending tool, it could still be a crucial low-cost alternative in case you run out of cash or decide to make a big purchase.

Either way, it is always worth comparing your options to make sure you have the best deal for you – whether that’s cash or plastic.

Are travel credit cards cheaper than cash?

Exchange rates offered by any provider will vary depending on a host of factors, so credit cards may not always be cheaper, but they are almost always a strong option.

However it  is important to remember that only specialist travel credit cards will beat cash, as everyday cards will likely charge fees of around 3% on all foreign currency transactions.

What are the best credit cards for travel?

Mastercard’s exchange rate will usually beat Visa’s, but it is important to compare the best travel credit cards available to find the right one for you.

Generally, Visa is more widely accepted, so consider where you are going and what you are going to be using your travel credit card for (everyday spending, cash withdrawals and so on) when you make your choice.

Could I use a travel debit card instead?

Travel credit cards are not the only alternative to cash, as many credit card providers now also charge low to no transaction and withdrawal fees.

It is also important to know that using a credit card involves borrowing money, often with high interest rates if you do not meet repayments. If you don’t think you will be able to pay back what you borrow on time, or you are unlikely to be approved for a credit card then it may not be the option for you.

Therefore, it is worth also doing a comparison to see if a cheap travel debit card can meet your needs.

Travel money: credit card basics

What exchange rate will I get?You will be charged your provider’s exchange rate on the day of processing, not the day you spend. It usually takes a few days to process a transaction, so if you checked the rate when you paid, there is a chance you will be charged a slightly different amount.
Does my provider need to know I'm abroad?Some providers need to know you are abroad, otherwise they might freeze your card when you try to use it. This is usually done as an automatic security measure. To avoid any doubt, it’s best to give your provider a call before you use your card abroad.
What if I use my card online?Your specialist travel card can also be handy if you are making a purchase online in a foreign currency. Standard credit and debit card providers will likely charge a fee for buying something in a foreign currency — even if you do it from your own living room. A specialist card would charge you the same fees as if you were abroad — usually nothing.

Money.co.uk’s top tips for spending abroad

Spending abroad can be costly, so make sure you compare the market for the best exchange rates available on your travel money before jetting off.