If you use your credit card abroad, watch out a large number of providers are ripping you off with unfair fees of up to 4.75%! Find out which cards you should be carrying, here.
Are you one of the many people who rely on their credit card, whilst abroad?
A recent survey by Moneyfacts has revealed that over two thirds of us (69%) use our plastic whilst out of the country, no doubt appreciating the convenience they offer. Many are probably wise to the fact credit cards can offer an excellent exchange rate. Instead of being converted using the pretty poor 'tourist exchange rate', your credit card purchases will be converted at a rate close to the 'interbank rate' (the rate used by the Banks themselves) meaning that you're getting a better deal. Relying on a credit card also means that we need to take less foreign currency and traveller's cheques, making it perfect for the less organised and ideal for those shorter trips. Some may even choose to use their card exclusively whilst abroad in order to build up loyalty points or cashback after all, we rarely spend as much on meals, travel and entertainment as we do whilst on holiday.
Unfortunately, by using your credit card abroad you could be being charged a fee for each and every transaction not to mention whopping fees for withdrawing cash. But two thirds of us (67%) have no idea.
Many credit card providers (including most of the big names) are guilty of charging what's known as a 'loading fee', each time you use the card outside the UK. This fee (which is usually about 2.75%) is slapped onto every purchase so a transaction for £100 will have an extra £2.75 added to it. Most people won't even notice after all, your statement will be covered in costs in different currencies and exchange rates a little Forex fee of 2.75% might not even be seen.
However, when you start to think about how much you spend on holiday, this little fee adds up fast especially when you realise that every single transaction is charged. It will all easily negate any cashback or loyalty points that you'd been building up.
And if you've ever withdrawn foreign currency from a foreign ATM, you're being stung by even more charges. On top of that loading fee, all providers charge a cash withdrawal fee, typically 2%. So withdrawing £100 will cost you an extra £4.75. Withdraw this same amount 10 times and you've been charged £47.50. Blimey!
Luckily, you can avoid the loading fee and minimise your cash withdrawal fee, simply by choosing your credit card carefully:
Best Credit Cards For Foreign Usage
| Provider | Withdrawal limit | Charge for foreignusage - EU | Charge for foreignusage - World | Cash Withdrawal Fee | Min. charge for Cash Withdrawals |
|---|
| Nationwide BS | £250 | 0% | 0% | 1.5% | £1.50 |
| Comic Relief | £500 | 0% | 0% | 1.5% | £1.50 |
| Lombard Direct | £300 | 0% | 0% | 2% | £2.00 |
| CSMA (Visa) | £300 | 0% | 1% | 1.5% | £1.50 |
| CSMA (Mastercard) | £300 | 0.25% | 0.25% | 1.5% | £1.50 |
| Caravan Club | £300 | 0% | 1% | 1.5% | £1.50 |
| SAGA | £500 | 0% | 1% | 1.5% | £1.50 |
| Liverpool Victoria | £300 | 0% | 1% | 1.5% | £1.50 |
Source: MoneyfactsAs you can see, the brilliant credit cards from Nationwide BS and Lombard Direct will charge absolutely nothing when used anywhere in the world and Nationwide's card has the lowest cash withdrawal fee. Both Nationwide BS and Lombard Direct are also currently offering a 0% deal for six months on both balance transfers and new purchases. For those that travel exclusively in Europe, the CSMA, Caravan Club, SAGA and Liverpool Victoria cards do not charge for any transactions in the EU.
If your card is not featured in this table and you regularly use it whilst abroad, it may be time to consider switching if you wish to avoid rip-off loading fees and high cash withdrawal charges. Have a look at your provider's website to see how much you're being charged. And for those that travel abroad regularly, it would be well worth checking out the Nationwide FlexAccount. This current account, as well as earning a healthy 3% AER interest, has the fantastic bonus of allowing you to make cash machine withdrawals abroad, for free.
It's also worth noting that it's not just credit card providers that can charge unfair fees some shops and retailers abroad may do so, too. Find out how to avoid this, here.
Find out how much your credit card charges you to use it abroad and if you're not happy, consider switching.
You can find out more, or apply for the Nationwide BS Credit card and pay no fees for use abroad in our Credit Card Centre, or switch to the Nationwide FlexAccount and withdraw cash abroad for free in our Online Banking Centre.
