Whether you’re jetting off to sunnier skies or setting sail on a summer sojourn, using a specialist overseas card is the best way to keep your costs down. Here are Moneywise’s best buys.
Taking credit
Take the Barclaycard Platinum Travel card. This product has no fees on worldwide spending when you use the plastic to pay. So, as long as you pay off the balance in full each month, you won’t incur any interest.
Plus, while conscious credit card users will be aware that withdrawing cash on a credit card is a no-no, there is no such trouble with this card. Many travel credit cards represent a good deal for paying by card but catch you out by applying interest immediately after you withdraw cash. But this is not the case for Barclaycard – again, as long as you pay off the balance in full every month.
Fail to repay your balance on time, and you’ll be charged an APR of 19.9% on spending and 27.9% on cash withdrawals.
The no overseas fees guarantee lasts until the end of August 2022, so you’ve got a good few years’ use.
An interesting alternative that’s worth considering is the Tandem Cashback card. While the Tandem card charges interest upfront on all your cash withdrawals at 18.9%, the product has no fees on card spending, plus the benefit of 0.5% cashback on all purchases you make. The APR is 18.9%.
Starling effort
If you’re risk-averse to spending on a credit card or don’t think you’ll be able to pay off the full amount each month to avoid interest, it may be wise to stick to a debit card.
Moneywise’s best buy in this respect is the Starling Bank debit card. Get one by signing up for a Starling current account by downloading the app to your phone. You can then start spending straight away using contactless phone payments, where accepted – there’s no need to wait for a physical card.
The card is free to use on spending and cash withdrawals worldwide. The account also pays 0.5% on balances up to £2,000 and your money is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000. If you don’t request an overdraft with the bank, setting up an account won’t cause a full credit check either. Another benefit of having in-app control is the added security of being able to put a temporary block on your card if you misplace it when you’re by the pool.
Alternatively, you may want to consider Monzo Bank. It provides a very similar current account and the app won this year’s Moneywise Customer Service Award for best banking app. The drawback with Monzo is that it limits you to withdrawing £200 in cash a month. After that, it charges 3% on cash withdrawals. There are no such restrictions on card spending, however.
| Card | Overseas fees | Overseas cash withdrawals | Interest | Exchange rate | Additional perks |
|---|---|---|---|---|---|
| Barclaycard Platinum Travel credit card | N/A | Interest charged after one month | 19.9% APR on spending, 27.9% APR on cash withdrawals | Visa | N/A |
| Tandem Cashback credit card | N/A | Interest charged immediately | 18.9% APR | Mastercard | 0.5% cashback on all spending |
| Starling Bank Current Account | N/A | N/A | N/A | Mastercard | Earn 0.5% interest on balances up to £2,000 |
| Monzo Bank Current Account | N/A | No fees up to £200 a month, then 3% | N/A | Mastercard | N/A |
| Source: Moneywise, 13 June 2018. | |||||
FEATURED PRODUCT
Starling Bank Current Account
With no fees on withdrawals or card spending and a host of in-app features, such as card blocking and spending trackers, Starling Bank’s current account is the darling of overseas spending. Plus, you’ll get 0.5% interest on current account balances up to £2,000, 0.25% on balances between £2,000.01 up to £85,000 and your deposits are protected by the FSCS.
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