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How to Avoid Overseas Card Charges

By Lulu Meade

Spending money abroad doesn’t have to cost a fortune, but it might require some forward planning! Read on to find out  the best way to avoid those pesky overseas card charges.

Can I use my Credit Card Abroad?

Tempting though it may be to continue using your normal debit card abroad, it really, really isn’t worth it. When you use a domestic card abroad, you have no control over the charges- there’s no shopping around for the best deal or best exchange rate. At a minimum, you’re going to be charged a non-sterling transaction fee for anything you spend on your domestic debit card- usually around 3% of the cost of your transaction. Many banks go further- adding an extra flat fee for each transaction charged to your card whilst you’re abroad, which can range from 50p to £1.50. That’s every time you make a purchase.

Exceptions

overseas charges

Not all debit cards are created equal, of course. Banks including Monzo and Starling don’t charge their customers for non-sterling transactions abroad. Monzo also allows free ATM withdrawals in the EU and a few other select countries (check out the details here). If you’re travelling in countries excluded from that list, Monzo customers are still able to withdraw up to £200 free of charge (in any 30 day period).

How to avoid overseas card charges

If you’re one of the unlucky customers with fiendishly high overseas card charges, you might want to look into getting a prepaid travel card. There are other options of course, you can just go old-school and exchange domestic cash into a foreign currency, but as many of us have become accustomed to the convenience of cards, that option might not appeal.

What is a travel credit card?

A prepaid travel card works in a similar way to exchanging cash to bring with you on holiday… just without the cash. You convert domestic to foreign currency digitally, usually via an app, and can then spend it or withdraw cash from an ATM whilst abroad on your travel card.

Advantages

There are obvious advantages to using a prepaid card like that- it’s far safer than carrying wads of cash around, more convenient for daily spending and it means you can see and select your exchange rate beforehand, so there are no nasty surprises.

Disadvantages

However, there are some downsides too. Travel cards don’t always work in every country or in every currency and you can’t borrow money on them - although that isn’t necessarily a negative as it encourages healthier spending habits!

As with any card, make sure you always read the small print. Some prepaid cards can come with hidden fees for taking money out of an ATM abroad, for spending money - even for not spending money! Make sure you shop around to find the best card for your needs.

prepaid credit card
Prepaid Credit cards

An alternative to a prepaid card for spending money abroad is a prepaid credit card- which works just like normal credit cards, minus the scary fees for use overseas. The key difference here is it isn’t prepaid with a set amount, which can make it easy to overspend. Some travel credit cards do offer rewards including cashback and voucher schemes, which may be worth looking out for! Like any credit card, however, you may be limited by your credit score, which means this isn’t an option for everyone.

To round up- please please please don’t spend money on your debit card abroad unless you have to. Make sure you check your card charges and caps to save yourself a scary bill when you get back home. Remember- there are plenty of options out there to make holiday shopping easy including prepaid travel and credit cards!

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Nova Money (former Cash Coach)