Going abroad on holiday? Think twice about using your credit card to withdraw cash from an ATM - unless you're using a special travel credit card like the Barclays Rewards card. We'll explain how using a credit card for travel cash can add to your holiday expenses through fees and interest charges.

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Withdrawal Fees

In total, typical credit card fees can add up to around 6% or more for withdrawing non-sterling cash on most credit cards.

This ~6% figure is composed of two types of fees - a cash withdrawal fee and a foreign transaction fee. Where a cash withdrawal fee exists, it is typically around £3, with a £3 minimum per transaction. The Foreign transaction fee (which you may also pay on credit card purchases made in another currency, say at a restaurant or hotel) is usually around 3% of each transaction, where it is charged on a card.

Higher Interest Rates

With few exceptions, credit cards charge a higher APR for cash transactions than purchases. A look at the four dozen credit credits we track revealed that average cash APRs are typically around 6 percentage points higher than average purchase APRs. As a result, it costs more to borrow cash from the credit card company vs the purchase rate, in most cases. This is especially painful on credit building cards, where representative cash interest rates range from 29.9% to 49.9% APR or more.

No Grace Period

In general, there's no grace period for cash transactions on a credit card - which means you start paying interest immediately. For the purposes of interest calculations, cash is treated differently from purchases. If you pay off your purchases in full each month, you won't pay interest on those purchases. Cash transactions, on the other hand, will be charged interest from the date of withdrawal even if you pay off the full balance. This holds true for the majority of credit cards in the UK.

That said, a few special travel credit cards like the Barclays Rewards card DO offer a grace period on non-sterling transactions (whereas most other cards in the marketplace do not offer a grace period on cash withdrawals, July 2026). You can find out whether or not a card has a grace period on cash withdrawals by reading the card's summary box.

May Damage Your Credit Rating

Cash withdrawals on your credit card are recorded on your credit history. Depending on your situation, this may or may not be a problem for you. Typically it causes the most damage for cardholders who already have a weak credit score and/or who may be looking to borrow elsewhere. Potential future lenders may be alarmed by cash withdrawals if they suspect you're short of funds and are borrowing cash via a credit card.

Better Alternatives for Cash Abroad

Instead of using your credit card for foreign cash withdrawals, consider cheaper alternatives.

Travel-friendly debit cards like Chase, Monzo, and Starling offer fee-free ATM withdrawals abroad (often with a monthly limit) and don't charge foreign transaction fees on purchases either. Prepaid travel cards can be loaded with currency before you leave and offer competitive exchange rates, though watch out for inactivity fees and top-up charges.

If you need larger amounts of cash, ordering foreign currency online before you travel and collecting it at the airport or having it delivered can work out cheaper than ATM withdrawals, especially if you shop around for the best exchange rates.

For day-to-day spending abroad, using a debit card or credit card with no foreign transaction fees (like the Barclays Rewards card mentioned earlier) is typically the most cost-effective option, reserving cash withdrawals for situations where card payments aren't accepted. Whichever method you choose, it's probably best to avoid airport and hotel bureau de change counters, which typically offer the worst exchange rates and highest fees.

Parting Thoughts

For those trying to save money, the extra costs associated with withdrawing cash on most credit cards are best avoided. Instead, look into buying some travel money ahead of time through one of the many comparison websites available in the UK. Of course, if you expect to need a large amount of cash (e.g., for a longer trip) be careful of pre-purchasing and carrying more than would be covered under your travel insurance.