When you head off on your holidays, be sure not to take these credit cards with you. Otherwise, you'll lose as you spend!
If you plan to travel abroad later this year (perhaps for a weekend break, motoring trip or family holiday), then be sure to pack the right plastic in your wallet or purse. Otherwise, you'll fall foul of an everyday rip-off which bumps up your spending on credit cards in yet another sneaky and annoying way.
You need to be wary because almost all credit-card issuers charge additional fees when you spend overseas or buy goods and services from foreign websites. This fee, known as a 'foreign-currency loading' or 'overseas-usage fee' can increase the cost of your purchases by up to 3%. Although this may not sound like a lot, it certainly adds up over time. For example, if you spend £2,500 a year abroad, then you could easily pay a totally unnecessary fee of up to £75 on top of this sum.
In order to expose this crafty con, I analysed almost two hundred popular credit cards in order to find out which card issuers are taking holidaymakers for a ride. Here's what my number-crunching revealed:
The Bad and Ugly: credit cards to avoid using overseas
- For the record, the most expensive credit card is the buy and fly! MasterCard issued by Goldfish/Morgan Stanley, which charges 3.00%. My advice would be don't fly and then buy with this card!
- Here's a long list of 54 card issuers and brands, all of which charge the bog-standard foreign-usage fee of 2.75%:
AA | Debenhams | MINT |
|---|---|---|
Abbey | Dunfermline BS | Morrisons |
Alliance & Leicester | First Direct | Mothercare |
Amazon.co.uk | First Trust Bank (NI) | NatWest |
aqua | GE Money | Northern Bank (NI) |
ASDA | Halifax | Northern Rock |
Bank of Cyprus | Hilton Hhonors | Norwich & Peterborough BS |
Bank of Ireland (UK) | HSBC | Royal Bank of Scotland |
Bank of Scotland | Intelligent Finance | Sainsbury's Bank |
Barclaycard | Jeep | SkyCard |
Britannia BS | John Lewis and Waitrose | Smile |
Capital One | Liverpool Victoria | SonyCard |
Cheshire BS | Lloyds TSB* | Tesco |
Chrysler | Marks & Spencer | The GM Card |
Citi (incl. AAdvantage) | Marriott | Ulster Bank (NI) |
Co-operative Bank | MBNA | Vanquis Bank |
Coutts & Co | Melton Mowbray BS | Virgin Money |
CSMA | Mercedes | Yorkshire BS |
- American Express (including branded Amex cards for BMW/Mini, British Airways and Nectar) charges 2.73%;
- Egg charges 2.65%;
- Clydesdale Bank, Hoare & Co and Yorkshire Bank charge 2.50%; and
- Leeds BS charges a fee of 2.00%.
We've got rid of the Bad and Ugly, so let's now admire the Good:
Best Buy credit cards for use worldwide
(no or low foreign-usage fees)
These cards/card issuers charge no fees for using your credit card overseas (or for buying from foreign websites): i24 from Goldfish/Morgan Stanley (but note the £275 annual fee!), Nationwide BS and the Post Office.
Taking fourth place in our ranking, the Saga Visa card charges a worldwide fee of only 1%. In addition, the CSMA, Liverpool Victoria and Saga Visa cards (all issued by friendly society Liverpool Victoria) levy no usage fees for spending in European Union countries.
In summary, don't take any old credit card abroad. If you don't want to pay £103 for every £100 that you spend, make sure you're carrying plastic issued by Nationwide BS, the Post Office or, in the EU, Liverpool Victoria. Otherwise, you'll lose out as you shell out!
More:12 Ways Your Credit Card Rips You Off! | Do Credit-Card Fees Stack Up?