Best credit and debit cards for travel

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Over the last couple of weeks, I’ve written about the things you should do before you book your holiday and why it’s important to take out travel insurance as soon as you do. 

This week I want to talk about spending money while you’re away.

I remember when I first started travelling on my own, I would scout around for the best exchange rate and buy my travel money before I go. 

Usually you had to buy at least £500 worth to get the best deal. At a time when a lot of people didn’t pay with cards, you could reasonably need that amount of money while away. 

Things have changed a lot since then. Now, cash is a bit of an afterthought.

Admittedly most of the destinations I visit will accept cards everywhere. The only exception I’ve come across in the western world is Berlin, where cash seems to be king. 

But even in places where you need to carry a bit of cash, whether for snacks or souvenirs, my preference is to just take it out from the ATM on location, so there’s no need to buy ahead of time or carry a large amount of cash, and the exchange rate tends to be better.

Fortunately there are now plenty of debit and credit cards that offer fee-free spending abroad.

Why do you need credit or debit cards for travel anyway?

There are two main reasons for getting a credit or debit card specifically for travel – it saves you money and it’s more secure.

Travel credit and debit cards don’t charge you a fee when you buy something at the shop and their exchange rates are usually near perfect, with no additional commission applied, so it works out cheaper than buying travel money from a Bureau de Change or using a regular card.

If you use a credit card abroad, all the usual protections apply. So if things go wrong, you shouldn’t be left out of pocket.

The downside of a credit card is that even if you’re able to withdraw cash from the ATM fee-free, you’ll still pay interest on that cash amount.

This is why it’s handy to also have a debit card for travel. 

And if you use a separate bank account specifically for this, you can move across the exact amount of money you need without worrying about your savings being stolen if your card is cloned or lost.

In my case, I have a credit card specifically for travel because most of my trips are for work and using a separate card allows me to track my expenses easily.

Credit cards for travel

My preference is always to use credit cards for travelling, just because of the extra protection from Section 75. 

I make sure I pay off the balance every month and I never use it to take out cash – even when there’s no ATM fee, interest is applied from the day you withdraw the money (rather than when your balance is overdue like the rest of your spending).

There are lots of credit cards that offer fee-free spending abroad at the moment, including some that require you to have current accounts with the provider. Below are some of the most popular ones, but it’s by no means an exhaustive list.

Before you take one out and use it, make sure you read through all the small print about fees and interest rates so you know when there might be additional charges for using the card.

Many also offer eligibility checkers so you can see whether you might be approved before you apply without affecting your credit score.

• Barclaycard Rewards credit card (Visa) – A brilliant cashback credit card; what sets the Barclaycard Rewards credit card apart is that it gives you 0.25% cashback on your spending.
• Halifax Clarity credit card (Mastercard) – Designed with travel in mind, you don’t need to be a customer to apply for Halifax’s Clarity credit card.
• NatWest credit card (Mastercard) – The NatWest credit card is available for its customers only. 
• Nationwide Member credit card (Visa) – The Nationwide Member credit card is available for its customers only.
• Virgin Money credit cards (Mastercard) – There are a few Virgin Money credit cards to choose from, including the Virgin Atlantic* credit card where you can earn points towards flights. However, it seems fee-free spending only applies when you make a purchase or withdraw cash in Euros, Swedish Kronor or Romanian Lei anywhere in the UK or the European Economic Area (EEA).
• Santander All in One credit card (Mastercard) – The Santander All in One credit card is for big spenders. Although it gives you fee-free spending abroad and 0.5% cashback, there’s a £3 a month fee to maintain the account, which might not be worth it if you won’t earn enough cashback.

Debit cards for travel

Travel-friendly debit cards are handy if you want to withdraw cash while you’re away as unlike credit cards, there’s no additional interest to pay.

I usually take one of each, with the debit card acting as a backup if I lose my credit card.

Obviously you’ll need to open a current account in this case but there’s no reason why you can’t use it exclusively for travel, topping it up only when you need to spend the money.

It’s worth looking out for any caps on cash withdrawals though – some are per day but some are per month.

• Virgin Money M Plus debit card (Mastercard) – Unlike its credit cards, the Virgin Money M Plus debit card will give you fee-free spending anywhere in the world. The current account also benefits from a 2.02% AER in-credit interest rate. There’s a switching offer on at the moment as well. 
• Chase debit card (Mastercard) – The Chase debit card will give you 1% cashback on your spending at home and abroad. 
• Starling Bank debit card (Mastercard) – There are no additional benefits to using the Starling Bank debit card although the account itself can be useful if you need to send large sums of money – on Faster Payments, the upper limit is £250,000, which saves you from paying to use CHAPS for big spends.
• Monzo debit card (Mastercard) – The free version of Monzo’s debit card has a monthly limit of £200 on cash withdrawals, but no limit on spending.

Alternatives to credit and debit cards

There are of course secure alternatives to credit and debit cards that can be used for travel, such as prepaid currency cards offered by the likes of the Post Office* and Travelex*.

These are the ones to go for if you can’t or don’t want to use a credit card and would prefer to keep your current account protected while abroad.

Personally I’m not a fan because the money is tied up in the card and getting it out is usually a hassle.

It’s also annoying when you don’t quite have enough money left on it to make a purchase but can’t top it up straight away either.

There are a couple of good alternatives though.

• Revolut – Revolut* is technically an e-money business in the UK, rather than a bank, so while your money is safe, it’s secured in a slightly different way. It basically works in the same way as prepaid cards – you can load it with 30 different currencies and it’ll let you spend in any currency. There is a charge to get the physical card though, and on the free version there’s a monthly foreign transaction limit.
• Currensea – Currensea* works like a conduit to turn your current account into a travel-friendly one. It only works with certain banks, and once you’ve connected your account, when you spend money on the card it automatically debits your current account in sterling so your bank won’t charge you a fee. While it offers fee-free international spending, it does charge a 0.5% commission, which means the exchange rate isn’t as good as some of the other options here.

Visa or Mastercard – does it matter?

I’ve listed whether a card is Visa or Mastercard above as they have slightly different exchange rates. 

Visa’s exchange rates are slightly better than Mastercard’s but the difference is around 14p for every £1,000 spent so not exactly a huge amount of money.

You can see the Visa exchange rate calculator here and the Mastercard one here.

Unless you’re spending a lot of money abroad, the difference is negligible.

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