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Apply for your holiday credit card now

Apply for your holiday credit card now

The pound has hit a 22-month high against the Euro so now is a great time to get your travel money if you're planning to kick start the summer with some guaranteed overseas sunshine this June Bank Holiday.

However, the likelihood is that you won't always want to carry cash around with you. And it's also likely that you be charged by your current debit or credit card provider for making purchases or cash withdrawals while abroad.

In this case, now could also be the time to consider applying for a credit card that's designed for overseas use as it usually takes one or two weeks to receive a credit card once you have been accepted. But what are the main benefits of taking out a credit card specifically for overseas spending and what cards are currently offering the best deals? We take a look.

Why choose an overseas credit card?

We all do a fair amount of spending when abroad and, just as when we're at home, we appreciate the convenience that a credit card offers. But would you spend so freely on your card if you knew that you would be hit with an extra bill for every transaction you make?

This is usually just what happens. A foreign exchange fee - also known as a loading fee or a conversion fee - which can be as much as 2.99%, is applied each time you hand your card over the counter. And then there is a standard cash withdrawal charge that will either be charged as a flat rate or a percentage of the amount you have withdrawn.

But there are a number of overseas credit cards that don't charge fees for use abroad - and some even have interest-free period on purchases and balance transfers.

The best overseas credit cards

When it comes to credit cards Halifax Clarity and Sainsbury's Gold (for a monthly fee of £5) are the only ones that don't charge either loading or withdrawal fees anywhere in the world. 

The Post Office and Saga Platinum cards along with Nationwide's Select credit card (although this is for FlexAccount holders only) won't charge for over-the-counter spending when you are overseas, but will charge for cash withdrawals.

Some of the cards, such as Nationwide and the Post Office, also come with 0% interest on purchases for a certain amount of time. You can compare these and other deals at MoneySupermarket's credit card channel.

Pitfalls

While a handful of overseas cards will not charge for cash withdrawals abroad, bear in mind this means they will not charge 'extra' - not that they won't charge at all. All credit card providers will charge for taking money out of the wall and, at up to 5% of the amount you are withdrawing or a minimum of £5, it is notoriously expensive.

Furthermore, the interest rate on cash withdrawals is higher rate than the standard quoted APR on credit cards - usually just shy of 27%. And worse still, you start paying that interest immediately.  In short, it's best that, whether you are at home or abroad, you avoid cash withdrawals on your credit card altogether.

The other point to note when sifting out the best overseas credit card for your June Bank Holiday break is that they are usually reserved for those with excellent credit ratings. You can assess your chances of being accepted first by using the SmartSearch tool at MoneySupermarket.

What are the alternatives?

If you don't want to take on another credit card, or don't have a credit score that's up to scratch, a prepaid card could be the way to go. This allows you to load the card up with currency before you travel and then use as you would a normal credit or debit card.

However, you should try to avoid using a prepaid card for anything where a deposit is taken, such as checking in at a hotel or hiring a car, as the money will come straight off this card and could leave you short.

When comparing prepaid cards, you should always look for one that that does not come with a set-up fee, purchase fee, or loading fee. The FairFX prepaid card is good example - and it can be topped up free of charge by debit card or bank transfer.

Be sure to pick the right card as it comes in either Dollar or Euro currency versions.

However, most prepaid cards do come with a cash withdrawal fee so it is probably best to treat them as you would a credit card and avoid making ATM withdrawals.

Counting cash...

In this case it's a good idea to take at least some currency with you on holiday and either an overseas credit card or a prepaid card - or both if you wish - as an alternative.

When buying your travel money it makes sense to do so as early as is possible. Certainly don't leave it until you get to the airport as the inflated exchange rates and commissions charged at the airport bureaus could see you paying an extra £10 for every £100 you buy.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

By Les Roberts, MoneySupermarket.com

Data provided by moneysupermarket Best Buy Credit Cards - For Balance Transfers
The data displayed on this table was correct when published at 21:04 25/10/2014
Credit card provider Balance
Transfer
Purchases Representative
APR (Variable)
Card provider - Barclaycard

Barclaycard

Platinum Credit Card with Extended Balance Transfer

0.00%
34 months
2.99% fee
0.00%
6 months
18.90%

Representative Example:

If you spend £1200.00 at a purchase interest rate of 18.90% (variable) your Representative APR will be 18.90% (variable).

Apply

Card provider - Barclaycard

Barclaycard

Platinum Credit Card with Balance Transfer

0.00%
33 months
2.79% fee
0.00%
6 months
18.90%

Representative Example:

If you spend £1200.00 at a purchase interest rate of 18.90% (variable) your Representative APR will be 18.90% (variable).

Apply

Card provider - Halifax

Halifax

Balance Transfer Credit Card

0.00%
33 months
2.80% fee
0.00%
6 months
18.90%

Representative Example:

If you spend £1200.00 at a purchase interest rate of 18.95% (variable) your Representative APR will be 18.90% (variable).

Apply

Data provided by moneysupermarket Best Buy Savings Accounts - For Easy Access
The data displayed on this table was correct when published at 21:04 25/10/2014
Savings account provider Interest
Rate (AER)
Min Investment Notice
Savings provider - Coventry Building Society

Coventry Building Society

PostSave Easy Access (2)

1.4% 500 none

Eligibility criteria:

Available to UK residents aged 16 or over.

Apply

Savings provider - Tesco Bank

Tesco Bank

Internet Saver

1.35% 1 none

Eligibility criteria:

Available to UK residents aged 18 or over.

Apply

Savings provider - Virgin Money

Virgin Money

Virgin Easy Access E-Saver Issue 12

1.3% 1 none

Eligibility criteria:

Apply

Savings provider - West Brom Building Society

West Brom Building Society

WeBSaveR 2

1.2% 1000 none

Eligibility criteria:

Apply

Data provided by moneysupermarket Best Buy Current Accounts - For Rewards
The data displayed on this table was correct when published at 21:04 25/10/2014
Current account provider Reward Overdraft
Rate (EAR)
Current account provider - first direct

first direct

1st Account

£100 cashback when you switch 15.90

Apply

Current account provider - Santander

Santander

123 Current Account

Up to 3% cashback on household bills 0.00

Apply

Current account provider - Halifax

Halifax

Reward Current Account

Up to £160 in the 1st year 0.00

Apply

Data provided by moneysupermarket Best Buy Loans
The data displayed on this table was correct when published at 21:04 25/10/2014
Loan provider Headline Rate Payment per month Total charge for credit Total amount you repay
Loans provider - The Loans Engine

The Loans Engine

4.60% £297.50 £709.82 £10709.82

Representative Example:

If you borrow £10000.00 over 3 years at a Representative APR of 4.60% fixed and an annual interest rate of 4.60% you would pay the above.

Apply

Loans provider - Fluent Money

Fluent Money

4.70% £297.92 £725.26 £10725.26

Representative Example:

If you borrow £10000.00 over 3 years at a Representative APR of 4.70% fixed and an annual interest rate of 4.70% you would pay the above.

Apply

Loans provider - Ocean Finance

Ocean Finance

12.30% £330.51 £1898.20 £11898.20

Representative Example:

If you borrow £10000.00 over 3 years at a Representative APR of 12.30% fixed and an annual interest rate of 12.30% you would pay the above.

Apply

Data provided by moneysupermarket Best Buy Mortgages - For Remortgage
The data displayed on this table was correct when published at 21:04 25/10/2014
Mortgage provider Interest
Rate (AER)
Max LTV Duration
Mortgage provider - HSBC Discount 60% LTV

HSBC Discount 60% LTV

0.99% 60% For 2 years

Apply

Mortgage provider - Norwich & Peterborough Building Society Tracker 65% LTV

Norwich & Peterborough Building Society Tracker 65% LTV

1.44% 65% For 2 years

Apply

Mortgage provider - Woolwich from Barclays Tracker 75% LTV

Woolwich from Barclays Tracker 75% LTV

1.49% 75% For 2 years

Apply

Mortgage provider - HSBC Fixed 60% LTV

HSBC Fixed 60% LTV

1.49% 60% Until 28/02/2017

Apply

Mortgage provider - Tesco Bank Tracker 60% LTV

Tesco Bank Tracker 60% LTV

1.50% 60% Until 30/11/2016

Apply

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