Santander has scrapped its zero-fee overseas spending card - so take a look at these other options for making transactions abroad.
This article is now out of date. For the latest information, read The best debit cards to use abroad and The best credit cards to use abroad
Out with the old and in with the new. Earlier this month Santander unveiled a brand new current account offering cashback on the money you spend on your council tax, utility bills and even your mobile phone.
All well and good. But to clear some room on the shelves for this deal, the Spanish bank’s Zero account – which offered fee-free spending worldwide – was closed to new business.
So with a flurry of Bank Holidays approaching, what are the best ways to spend while on holiday abroad?
Currency cards
If you’re an occasional traveller, or spend most of your time overseas in countries with the same currency, a pre-paid card will probably be your best option.
You just top them up online and then spend when you are abroad. The accounts are available in currency specific versions (most commonly Euros and US Dollars, although Travelex offers a wider range) or global multi-currency versions. If you pick a specific denomination card, your cash is converted from Sterling when you load up the account, with no conversion or purchase fees. The global currency cards on the other hand do charge conversion fees when transactions go through.
The table below has a full rundown of the top cards around at the moment.
Caxton FX offers the best conversion rate for spending in Euros. FairFX has the best price for US Dollars – although getting hold of $500 on the Caxton card will only cost you 41p more.
It’s also worth noting that the FairFX cards all charge for overseas ATM withdrawals. Every other currency card provider offers this for free. In fact, My Travel Cash will even give you 1% cashback on all of your spending – although the interest rates on the cards are not as competitive as the Caxton FX and FairFX accounts.
On the global multi-currency front, FairFX and Travelex offer the cheapest rates with conversion fees of 1.4% and 1.49% respectively. But again, the FairFX card does charge fees for withdrawals while every other account is free to use at the ATM.
All of the cards are free to purchase (FairFX’s card is free to lovemoney.com readers who load on £50).
|
Card and currencies offered |
Price of currency card loaded with €500 |
Price of currency card loaded with US $500 |
Minimum card deposit |
Fees on specific currency cards |
Fees on global traveller card (transactions in any currency) |
|
€, US $ |
£423.72 |
£319.49 |
€150, $200 |
No conversion, purchase or ATM fees, redemption fees (back to £) and domestic spending fees apply. |
2.75% transaction fee, no international ATM fees. |
|
€, US $
|
£425.89 |
£319.08 |
€60, $75 |
No conversion or purchase fees, €1.50/$2 ATM fee, refund fee. |
1.4% overseas transaction fee, £1 international ATM withdrawal fee. |
|
€, US $, Canadian $, Australian $, New Zealand $, S African Rand |
£429.15 |
£322.12 |
£100 |
No conversion, purchase or ATM fees. Inactivity, overdraft and cashout to £ fees apply. |
1.49% overseas transaction fee, no international ATM fees. |
|
My Travel Cash (1% cashback paid on purchases) €, US $ |
£431.85 |
£323.21 |
€30, $40 |
No conversion, purchase or ATM fees. Inactivity, dormancy and cancellation/redemption fees apply. |
2.99% overseas transaction fee, no international ATM fees, 1% cashback on all spending. |
Prices correct on 27 March 2012
Debit cards
Now Santander has withdrawn its Zero current account, Norwich and Peterborough Building Society boasts two decent options. The Gold Classic and Gold light accounts both come with zero currency conversion fees and no ATM charges.
To get hold of the Classic account you need to pay at least £500 in each month or foot a £5 charge. For the light account, you only have to make five transactions each month to avoid the £5 fee – however no authorised overdraft is available on this deal.
Finally, there's the Metro Bank current account, with which there are no charges on foreign transactions.
Credit cards
Overseas spending options are far more plentiful if you’re after a credit card. Halifax’s Clarity is one of the best accounts. It has no conversion or ATM fees – though you will be charged interest from the moment you withdraw any cash, even if you clear your whole bill on time. The APR on the card is 12.9% and daily currency exchange rates can be found on the MasterCard website.
The Sainsbury’s Gold Card is another good option. Again, there are no fees for cash withdrawals or currency conversions and the exchange rate is set by MasterCard. What’s more, unlike the Halifax card, you won’t pay any interest on cash withdrawals, providing you pay off your balance on time each month. The downside is that you will have to shell out £5 each month for the account.
You can also get fee-free conversions using the Post Office Platinum MasterCard, however ATM withdrawals will cost you. The card also offers 14 months at 0% on balance transfers and three months at 0% on purchases.
And finally…
Here are two more essential pieces of advice to keep in mind when spending abroad:
Never change money at the airport: Exchange counters at airports and ferry terminals tend to give the worst exchange rates. So make sure you change your cash well in advance.
Always pay in the local currency: If you’re spending on card always make sure you choose to pay in the local currency, not in Sterling. Pressing the Sterling button on an overseas chip-and-pin handset will mean the local bank handles the conversion, often at a poor exchange rate.
More: Big budget month day 15: how to have a holiday for less | How to beat sneaky budget airline charges | How British banks rip us off abroad