MONE Y
SPENDING POWER
You put plenty of thought into what to pack in your suitcase, but what about what you carry in your wallet? Here’s our guide to the best credit and debit cards to use when travelling
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here are a number of charges you can face when paying with plastic abroad. Pick the right card and you can eradicate most of these, making foreign transactions much cheaper. First, consider the cost of converting your money into the local currency. Just like when you buy currency at a foreign
exchange, the rate can vary between different card providers. Your provider will use an exchange rate set by Mastercard, Visa or American Express – these are all very close to the “spot” price so offer a better rate than you would get at a foreign exchange. Of the three, Mastercard tends to offer a slightly better
exchange rate than Visa or American Express but it is a small difference. For example, at the time of writing Mastercard was offering €1,157 for £1,000, compared with €1,150 from Visa. On top of the exchange rate, many card providers – both
debit and credit – charge a non-sterling transaction fee. You will pay this every time you use it, and it is typically up to 2.99 per cent of the transaction. Ten there is the non-sterling cash fee. Tis is a charge
of about 3 per cent whenever you withdraw cash from an ATM. Also, if you take out money using a credit card you may be charged interest from the moment the notes are in your hands. It is not uncommon to come across debit and credit
cards that charge all of these fees when you use your card abroad, and that can quickly add up to an expensive transaction. Let’s say you spend £1,000 in a foreign transaction – the non-sterling transaction fee could add
bus ine s s tr a v el ler .c om
£29 to the cost. Withdraw £1,000 with a card that charges a non-sterling cash fee and it could mean a £30 charge. Take money out using a credit card and interest could add about 20-30 per cent to your costs.
WHICH CREDIT CARD? Te good news is that it is easy to avoid all those extra charges – all you need to do is pack the right plastic when you head overseas. If you are looking for a credit card then there are two great options to choose from. Te Barclaycard Rewards card does not charge fees on transactions or withdrawals when you are abroad. Plus, there is no interest to pay, even on cash withdrawals, as long as you pay your bill in full. It also comes with a perk – 0.25 per cent cashback on your spending. Te only drawback, and it really is a small niggle, is that the Barclaycard Rewards card uses the Visa exchange rate, which is oſten marginally worse than the Mastercard one. To get the Mastercard exchange rate
you could go for the Halifax Clarity card. Tis charges no fees on foreign spending or withdrawing money but you will pay interest at 19.9 per cent APR on cash withdrawals. Still, pay your bill in full and you won’t be charged interest. Te added bonus of putting your overseas spending on
a credit card is that your purchases are protected in case things go wrong. Section 75 of the Consumer Credit Act
→ MAY/JUNE 20 2 1
It is not uncommon to come across debit and credit cards that charge multiple fees when you use your card abroad
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