Can I use a credit card abroad?

Yes, you can use a credit card abroad. There are pros and cons to consider, and we're here to help you figure them out. Let's dive into some common questions about using a credit card abroad so you can make an informed decision.

Will I get charged for using my credit card abroad?

Yes, there are likely to be some extra fees when you use your credit card abroad. These can include:

• Non-sterling transaction fees: A percentage of each purchase made in a foreign currency, typically 2-3% of the transaction amount
• ATM withdrawal fees: Extra charges for taking out cash from an ATM
• Dynamic currency conversion fees: Additional costs if you choose to pay in pounds instead of the local currency, often with a poor exchange rate.

It's a good idea to check your credit card's terms and conditions or contact your provider to understand the specific fees you might face.

If you choose to pay in pounds instead of the local currency, you might also face dynamic currency conversion fees. This is when the merchant offers to charge you in your home currency instead of the local one, often with a poor exchange rate and additional fees.

Do I need to tell my credit card provider before I travel?

Yes, it's a good idea to inform your credit card provider before you travel. Credit card providers have measures in place to protect you against fraud, which can include freezing your card if they spot unusual transactions and assume suspicious activity.

By letting your provider know when and where you're travelling, you can avoid having your card temporarily blocked. Many providers allow you to do this through their app, so check if that's an option for you.

It can help to make a note of your credit card provider’s phone number and keep it in your mobile and with your holiday documents. This way, if your card gets frozen, lost, or stolen, you can quickly contact them to resolve the issue.

Benefits of using a credit card abroad

Using a credit card abroad has its perks, such as:

• Convenience: Credit cards are widely accepted around the world, making them a convenient payment method.
• Protection: Purchases made with a credit card are often protected under Section 75 of the Consumer Credit Act, which can be helpful if something goes wrong with a purchase.
• Rewards: Many credit cards offer rewards points or cashback on purchases, which can add up during your travels.

Disadvantages of using a credit card abroad

While using a credit card abroad can be convenient, there are some potential downsides to keep in mind:

1. Foreign transaction fees: Many credit card providers charge a "non-sterling transaction fee" for purchases made in a foreign currency. This fee is typically around 3%, but it can vary.
2. Dynamic currency conversion: Some merchants may offer to charge you in your home currency instead of the local currency. This might seem convenient, but it often comes with a poor exchange rate and additional fees.
3. ATM withdrawal fees: Using your credit card to withdraw cash from an ATM can be expensive due to handling fees and foreign transaction fees.
4. Fraud risk: There's always a risk of your card being compromised, especially if you're using it in unfamiliar places.

When using my credit card abroad, what currency should I pay in?

Always pay in the local currency, not pounds sterling.

When using your credit card abroad, you'll often be asked if you want to pay in the local currency or in pounds.

Choosing the local currency gives you a better exchange rate and helps you avoid additional conversion fees (known as dynamic currency conversion) that merchants add when converting to pounds. Your card provider will still convert the amount, but typically at a more favourable rate than what merchants offer.

Can I use my credit card to withdraw cash on holiday?

Yes, you can use your credit card to withdraw cash while on holiday, but it's not always the best idea:

• Credit card cash withdrawals: Come with hefty handling fees plus foreign transaction fees, making them expensive
• Debit card alternative: Usually offers cheaper ATM withdrawal fees abroad

Before you travel, check what fees your different credit and debit card providers charge to make the most cost-efficient choices while you're away.

Is it better to take cash or card on holiday?

Taking both cash and a credit card on holiday is often the best approach. Relying on just one can leave you in a tricky situation if something goes wrong. For instance, if your credit card stops working and it's your only payment method, you could be stuck. But if you have cash as well, you can use that while sorting out your card issues.

On the flip side, if you lose your cash or it gets stolen, you could be left without money for the rest of your trip. Lost or stolen cash is notoriously hard to recover. However, having your credit card as a backup can save the day in emergencies.

Bringing both cash and a credit card also gives you flexibility in how you pay for things.

Using a credit card for larger purchases, like car hire or day trips, provides extra protection under Section 75 of the Consumer Credit Act (for items costing between £100 and £30,000). This keeps your cash available for smaller expenses like souvenirs.

To take your credit card abroad, or not to take it?

Ultimately, the decision is yours. Consider the following:

• Convenience vs. cost: Weigh the convenience of using a credit card against the potential fees.
• Security: Think about the security of carrying a credit card versus cash.
• Backup plans: Ensure you have a backup payment method in case of emergencies.

That way, you can relax and enjoy your trip, knowing you're covered whatever comes your way. Happy travels!