We all love the feeling of looking forward to a holiday, packing all the essentials, irritating your work-mates with daily updates of the weather forecast of your anticipated destination, and sorting out how you’re going to pay for it all. Okay, maybe not that last one. But despite not being the fun bit, finances are a big part of planning a holiday.
One of the last hurdles people get caught on is the most money-savvy way to spend abroad,. Between foreign transaction fees, bank charges, exchange rates, commission, it’s all a bit much and most of us would rather be thinking about the cocktail we’ll be sipping instead of whether we’ve incurred extra charges for buying it on a credit card.
So, in the most succinct way we can, we’re going to lay out our top three tips to be aware of when using a credit card to spend overseas.
1. Watch out for foreign transaction fees.
Many card issuers charge fees for paying in foreign currencies. These are charged on top of the exchange rate and vary from card to card. Travel credit cards are designed for you to spend abroad, so they (in theory) should have good deals on foreign transaction spending. Or even better, no foreign transaction fees at all.
2. Be aware of Section 75
Most credit cards will give you Section 75 protection. This means the credit card issuer is liable along with the retailer if something goes wrong, for example, those sunnies you bought are faulty and you can’t get a refund from the retailer. It could cover you for purchases between £100 and £30,000, which is a little peace of mind especially when you’re making big purchases like flights and hotels.
3. Consider paying in the local currency
When the waitress/ATM/card machine asks if you’d like to pay in the local currency or in GBP, it can be cheaper to pay on your card in the local currency. By paying in the local currency your card issuer will carry out the currency conversion rather than the retailer, whose rates might not be as good.
There’s a range of credit cards specifically designed for travel, so if you’re jetting off you may want to consider one of these.
Tandem offers the Cashback Credit Card, with benefits for travel (18.9% APR representative, variable). With the Tandem card, you’re not charged anything extra for overseas purchases. You’re also not charged for cash withdrawals abroad, but you will be charged interest from the day you withdraw cash, just as you would be at home.
It’s also got the added bonus of 0.5% cashback on all of your purchases (both home and abroad). And you can track your spending in the Tandem App while you’re sunning yourself on the beach.
There are many different ways to spend abroad, we hope you find the one that works best for you and your holiday. Bring on the summer holidays.