7 min read

5 tips for using your credit card abroad

Andre Spiteri
29 March 2017

If you’re packing your credit card on your travels, we’ve got some top tips to follow when using your card abroad.

Whether you’re travelling for business or a spot of well-deserved R&R, using a credit card can be a convenient way to pay abroad. Credit cards are widely accepted and they save you the hassle of having to carry a load of unfamiliar cash around.

But, before you jet off and start maxing out your plastic, here are some tips on how to make the most of your credit card and some behaviours you really should avoid.

1. Choose your card wisely

First things first, make sure you travel with the right credit card.

Credit cards attract a number of fees when you use them abroad. Typically, you’ll be charged the following fees:

  • A foreign transaction fee
  • A withdrawal fee if you use your credit card at an ATM

However, some cards made specifically for travel have significantly lower foreign transaction fees. And many don't have any. Whether you plan on making heavy use of your credit card or just intend to pay for the occasional purchase, it’s worth shopping around. Using the right credit card could save you a lot of money and make your trip less costly.

But remember like any credit card, whatever you spend will also attract interest unless you repay the amount in full when the bill’s due.

See credit cards selected especially for you on ClearScore

2. Give your card provider advance warning

Once you’ve chosen the right credit card, contact your card provider and let them know where and when you’ll be abroad.

Card providers monitor credit card transactions in order to detect and prevent fraud. Unless your provider knows you’re abroad, there’s a chance your transactions will be flagged as suspicious. If this happens, your card can be automatically blocked for security reasons, leaving you unable to use it.

That being said, misunderstandings do happen and your card might be blocked even if you’ve given your provider advance warning. Most providers have travel helplines for these kinds of emergencies. Make sure you take this number with you so you’ll know who to call if something goes wrong. The number will also come in handy if your card gets lost or stolen. We’ve got some top tips to stay safe with a credit card whether you’re at home or abroad.

3. Avoid using your credit card for ATM withdrawals

Making an ATM withdrawal from your credit card account is called a cash advance. This is one of the most expensive things you can do with your credit card. In addition to foreign transaction fees, you’ll also have to pay a cash advance fee and interest on the amount you withdraw.

The rate of interest on cash withdrawals is usually much higher than the rate charged on purchases. What’s more, there’s no grace period so you'll start accumulating interest from the moment you take the money out.

Alternatives to credit cards for travelling
Revolut

Essentially a MasterCard branded, pre-paid debit card. You load it with cash from your bank account and use the app to convert pounds to US dollars or the Euro at the mid-market rate. You can then pay directly in the foreign currency. This means you avoid paying any foreign transaction fees.

Curve

This card allows you to link all your bank cards, including your credit card, to one single card. Using the Curve card bypasses your credit card provider's fees. So you only pay the mid-market rate plus 1% on foreign transactions

4. Always pay in the local currency

When you pay for purchases using your credit (or debit) card, you may be asked whether you’d like the transaction to be converted into British Pounds. This sounds convenient, but it’s usually a bad idea.

When you pay in the local currency, the conversion from British Pounds (GBP) is worked out at the mid-market rate. This is the wholesale rate used by traders on currency markets, so it’s usually the fairest exchange rate you can possibly get.

But if you choose to make the transaction in GBP, the conversion will be carried out using something called ‘Dynamic Currency Conversion’. The most important thing to know about this method is that it uses a rate that’s usually much higher than the going rate. It’s a double whammy - you’ll get an unfavourable exchange rate and you’ll be charged foreign transaction fees on top.

The rules of Dynamic Currency Conversion also apply to ATMs
Only withdrawals in the local currency are worked out at the mid-market rate. If you choose to perform the transaction in British Pounds, the conversion will be made using Dynamic currency Conversion, so you may end up paying more.

5. Always have some cash as backup

While credit cards are widely accepted in most major cities and tourist hotspots, you shouldn’t rely entirely on your card.

Visa and MasterCards are almost universally accepted in places that take credit card payments. American Express cards, however, have a smaller network, so you might run into acceptance issues.

Some places may have minimum payment requirements. This means they won’t accept card payments unless you spend a certain amount. Card readers may also be temperamental or your card might run into issues. For these reasons, it’s best to carry some cash with you just in case. That said, do keep the amount of cash you have on you to a minimum and keep it out of sight as much as possible.

If you're looking for a credit card, head to the 'Offers' section of your ClearScore account to check your eligibility before you apply. And then you can pack those bags and hop on that plane knowing that you've got it covered when it comes to using a credit card abroad.

by Andre Spiteri

Andre is a former lawyer turned financial writer. Andre has written this article especially for ClearScore.

ClearScore exists to make your finances simple.
We offer a free service where you can handle everything to do with credit in one place. In your ClearScore account, you can see your credit score and the full details of your credit report. Your credit cards, mortgages, mobile phone contracts, loans, overdrafts and utilities all on the record. Our goal is to make ClearScore as simple, calm and straightforward as possible. Money is stressful enough.