The best cards to use on your holidays

If you’re jetting off on holiday soon, you might be considering how to pay for any purchases you make while you’re abroad.

The problem is that many debit and credit cards charge you for the privilege of withdrawing cash or paying for items when you’re overseas. So how can you get around this?

Fortunately, there are a handful of cards that allow you to use them abroad without charging you rip-off fees. Bear in mind that the exchange rate that each one offers will be different and you might want to take that into consideration when you're comparing.

Let’s take a closer look at the cards that don't charge you for using them abroad, starting with credit cards.

Credit cards

The big benefit of using a credit card is any purchases you make over £100 are covered if they turn out to be faulty or damaged by Section 75 of the Consumer Credit Act. This means you can claim compensation either from the merchant or your credit card provider.

You'll also be better protected in the unfortunate event that your card is fraudulently used.

Post Office Platinum credit card

The Post Office Platinum credit card won’t charge you a fee for any purchases you make overseas using your card. This is also the case if you make any online transactions from home in a foreign currency.

You can also avoid a cash advance fee when using the credit card to order currency or travellers cheques with the Post Office. You need to pay it off on time though or you'll be hit by interest charges of 27.9%.

Halifax Clarity credit card

The Halifax Clarity card won't charge you for purchases anywhere in the world and the representative APR is only 12.9%.

If you make any cash withdrawals, you won't be charged a fee but you will be charged interest from the date the withdrawal is made – so you should still avoiding using this card at an ATM if at all possible.

Capital One Classic Extra

Although the Capital One Classic Extra card is designed for people with a less than perfect credit history, it's a good all-rounder for anyone. As well as no foreign purchase charges, you also earn 0.5% cashback on all purchases and a £10 annual bonus for paying your balance on time.

Make sure you do pay your balance off, otherwise you'll be hit by whopping charges of at least 34.9% APR.

Aqua Advance MasterCard

The aqua Advance MasterCard is also designed for people with a less than perfect credit rating, but is also a very good piece of plastic for taking abroad as there are no fees for foreign purchases.

However, as it a card aimed at people looking to rebuild their credit score, it comes with a very hefty representative APR of 34.9% – so make sure you pay off your balance in full each month.

Saga Platinum credit card

If you're aged 50 or over, the Saga Platinum credit card will also let you sidestep foreign currency fees when you use your card for spending overseas. There’s also nine months of interest-free spending and balance transfers (3% fee) with this card. Just bear in mind that after this point, you’ll be charged interest of at least 11.9%.

Unlike the majority of credit cards, with the Saga Platinum credit card you'll also benefit from 55 days interest-free on cash withdrawals – meaning that if you do take out money from an ATM abroad, you won’t be charged interest providing you clear your balance within 55 days.

If you don’t clear your balance within this period, the interest rate jumps to 23.9% and this will be charged from the date you withdraw your money – so don’t get caught out! You should also bear in mind there is a 2% fee (minimum £2) for withdrawing cash on your credit card.

Nationwide Select credit card

If you have a Nationwide FlexDirect current account, Flex Account (extra conditions apply) or FlexPlus account, you're eligible for the Nationwide Select credit card.

This card offers commission-free purchases abroad plus 0.5% cashback on all sterling purchases.

It also offers 15 months interest free on purchases as well as 26 months 0% on balance transfers (2.4% fee). The representative APR is 15.9%.

[Compare credit cards that don't charge for overseas use]

Debit cards

Norwich & Peterborough Building Society, Cumberland Building Society and Metro Bank offer accounts with debit cards that offer fee-free spending abroad, although Metro Bank now limits it to Europe only.

The Norwich & Peterborough Gold Classic account requires you to pay in at least £500 each month or maintain a balance of £5,000 or you will have to pay a £5 'underfunding charge'.

If you live in the Cumberland Building Society area then its Plus account also offers free usage overseas but you need to pay in at least £750 a month or pay a £2 fee.

In terms of Metro Bank, you need to visit a branch (or store, as they prefer to call them) to open an account. At the moment, all of its branches are in the south-east of England, with the majority in London. But if you're planning a trip to the capital anyway, you could spend half an hour opening an account and then manage it online.

A couple of high street banks also don't charge fees for cash withdrawals in certain countries.

If you're a Barclays customer you won't be charged for using a Barclays ATM or an ATM that's a member of the Global Alliance. While if you're a Santander customer, you can use its ATMs for free across Spain, providing you deposit at least £500 a month into your current account.

And HSBC Premier and Advance account holders aren't charged cash fees for foreign ATM withdrawals, although you still pay transaction fees.

Prepaid currency cards

Another option is prepaid currency cards. The great thing about these cards is that they allow you to load up your card with funds before you jet off abroad – as well as when you’re out there, making it easier (in theory) to stick to a budget.

Certain cards don’t charge you for making purchases overseas or making cash withdrawals. And because these cards are prepaid, there’s no need to worry about interest rates. What’s more, you’ll generally get a competitive exchange rate and you can often 'lock in' to that rate when you think it's looking good, even if you're not travelling at that time.

There is a wide range of prepaid currency cards on the market, from the likes of the AA, the Post Office, FairFX, Caxton FX, Travelex and My Travel Cash.

Make sure you look out for hidden fees such as loading fees, dormancy fees (charged if you don't use the card for a while) and closure fees.

[Going away? Don't forget your travel insurance – compare policies here]