To take your credit card on holiday, or not to take it? That is the question.
Deciding whether to leave your credit card at home or not when you go on holiday can present a conundrum for some. After all, there are advantages and drawbacks whatever you decide.
We’ll take you through some of the questions people ask about taking their credit card on holiday. Then, you can decide what to do with confidence.
It could be ideal to take both. Only having one or the other could leave you in a sticky spot if something went wrong. For example, if your credit card stopped working and this was your only means of paying for things, you’d be a bit stuck. But if you had cash as well, you could use that while you sorted your card out.
Or, if you had cash in your pocket and it did a disappearing act, you could be penniless for the rest of your holiday. Lost or stolen cash is notoriously difficult to get back. However, having your credit card in your wallet gives you a useful fallback plan in case of emergencies.
Taking both cash and a credit card on holiday also means that you can choose how you pay for different things. Spending on a credit card comes with the additional protection offered by Section 75 of the Consumer Credit Act (as long as each item you’re buying costs over £100 but not more than £30,000), but we’ll talk about this a bit more later.
Choosing to use your card for pricier purchases on your trip, like car hire, day trips or watersports, means you’ve got that extra protection when it counts most. And, this keeps your cash available to cover smaller costs like souvenirs, a novelty pool float, or treating yourself to a delicious gelato.
These days, most countries and venues around the world accept card payments. So, you should be able to use your credit card pretty much anywhere you’d use it at home – in supermarkets, restaurants, to pay for attractions or day trips, you name it. That said, cash is still a popular payment method for some things, like taxis. And, you may come across the odd shop or café that doesn’t take card payments, too. So, it’s best not to assume you can use your credit card absolutely everywhere, and cover all your bases.
Ideally, yes. Credit card providers should all have measures in place to protect you against fraud. These can include freezing your card if they spot an unusual transaction, and this is exactly what using your card abroad could be considered. By giving your card provider a quick call to tell them when and where you’re going on holiday, you could avoid them flagging your holiday spending as “suspicious” and putting your card temporarily out of action. Many providers now enable you to do this via their app, so it's worth checking whether this is possible that way too.
Top tip: Make a written note of your credit card provider’s phone number and keep it with your holiday documents or in another easy-to-find place. This way, if your card does get frozen while you’re away, or if it gets lost or stolen, you’ll be able to find their details quickly and jump straight into action to get it sorted.
It's likely. Many credit card providers charge what’s known as a “non-sterling transaction fee” when you use your credit card to spend or withdraw cash in a foreign currency. This fee will usually be added to each foreign purchase you make, so whatever you’re spending, remember that it may cost a little bit more than it seems at the time.
Card providers all set their own fees for using your card abroad. So, to check what you’d be charged, you’ll need to take a look at your credit agreement or speak to your card provider. Typically, this type of fee is about 3%, although some credit card companies may charge more, and others may not charge these fees at all.
You might wonder why you’d have to make this choice. But perhaps surprisingly, it is an option on many card machines you might encounter while abroad. There are a few things to consider when deciding whether to pay in the local currency or in sterling, such as:
While you could attempt to work out which is cheaper on the fly, this would mean doing some tricky sums (no thanks)!
A good rule of thumb to follow is that if you choose to pay in sterling, the exchange rate will be worked out by the company you’re spending with. However, if you pay in the local currency, the exchange rate will be worked out by your card issuer, (VISA, Mastercard, etc.). Generally, card issuer exchange rates are much better, and so even with transaction fees in the mix, it’s usually cheaper to pay in the local currency.
Yes, you can. However, using your credit card to get extra cash out of an ATM isn’t advisable, either at home or abroad. This is because withdrawing cash using a credit card can come with hefty “handling” fees. When you’re abroad, you may also have to pay transaction fees for spending in a foreign currency – on top of handling fees. So, it can become very expensive, very quickly.
Using a debit card to withdraw cash while you’re abroad might be cheaper in terms of fees, so could be a better option if you need to use an ATM. Before you travel, make sure you check what fees your different credit and debit card providers charge, so you can make the most cost-efficient choices while you’re away.
Yes, it does. As long as your credit card was issued in the UK, then the protection offered by Section 75 still applies, even if the purchase you need to claim for was made abroad.
In case you need a recap, Section 75 of the Consumer Credit Act is the law that governs how certain types of credit agreements should be conducted. In a nutshell, Section 75 lays out extra protection that kicks in when:
On holiday, an example of when you may be able to claim under Section 75 could be if you booked a day trip that was cancelled by the tour operator, but they won’t refund you the cost, or have mysteriously vanished and you can’t get hold of them.
Remember though, Section 75 won’t protect you if:
If you aren’t keen on using your credit card abroad, then these are your other options:
You can use the debit card linked to your bank account in much the same way as a credit card while abroad, and with the same considerations. So, remember to tell your bank before you travel if you plan to use your debit card abroad. And, look up what (if any) fees you’ll be charged for spending or withdrawing cash in a foreign currency.
However, if you use your debit card abroad, your purchases won’t be covered by Section 75, as this only applies to credit cards.
Pre-paid travel cards are brilliant if you want to be able to pay by card while you’re on holiday and don’t want to risk taking your usual credit or debit card. You simply load them up with money before you leave for your holiday, and you’re away. Some pre-paid card providers still charge transaction fees when you use them abroad. So, make sure you look for a pre-paid card that’s specifically for travelling to keep fees to a minimum, if they’re charged at all.
It's worth bearing in mind that when you use a pre-paid card, you can only spend what you’ve loaded onto the card, and once it’s gone, it’s gone. So, consider how you’d top up the card if you needed to, whether that means taking extra cash, or your debit or credit card.
We’ve touched on why we don’t think it’s a great idea to only take cash on holiday, but of course it is still an option if all things considered, it’s what you prefer to do. If you do go down this route, then consider these tips:
Not booked your trip yet? Weigh up the pros and cons of paying for a holiday with your credit card.
Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.
Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.
Sign up for tips on how to improve your credit score, offers and deals to help you save money, exclusive competitions and exciting products!
