Get cash cheaper when you are abroad - find
the best cards and accounts to use.
|
Publication date: 20th
April 2012 Subjects: cash,
money, holiday, credit cards, debit cards, current accounts, Get your money cheaper when you are abroad One question we are frequently asked is what is the best card to use overseas, or how can I get Euros from an ATM without paying through the nose for it! The first thing to say is that we would suggest taking a couple of our recommended payment methods at least, as many can be obtained free of charge, and this will give you greater flexibility should you have problems overseas. Losing a card or having your account stopped because the bank think a payment is suspicious can be very disruptive to your break if you only have one payment method. Debit Card If you live or work in or around London you could consider a Metro Bank account - Metro Bank are a new bank launched in 2010, and currently have a few branches in London (more are planned in and around the capital). Their current account comes with a fee free debit card, but you have to visit a branch to open an account. Further afield the Norwich & Peterborough BS has 'refreshed' its current account products with a 0% overseas purchase fees and no cash withdrawal fees anywhere worldwide. To qualify for a free Gold Classic you need to pay in £500 per month or there is a £5 fee monthly. A similar fee is charged for using an authorised overdraft by £10 or more. There is an alternative Gold Light card where a charge of £5 a month is levied if you make five transactions or less a month. If you are looking for a large branch network the obvious choice is Santander and their Zero account - however you do need to have either £10,000 in one of their savings accounts, or a mortgage or investment product to qualify for it - it does offer both commission free purchases and fee free ATM withdrawals anywhere in the world. You will also potentially qualify for a £100 new customer bonus if you are not currently with Santander. Credit cards The outstanding best buys
are detailed below, but the overiding rule is - use one of these cards for purchases and a prepaid card (see further down the page) for cash withdrawals. Preloading Your Credit Card A top moneymaxim tip if you have plans to use a credit card which either has no interest free period or charges interest on cash advances from the date of withdrawal is to 'preload' your card. Credit you account before you travel, and you won't pay interest on your spending, as your account will be in credit throughout. You can always top up using online banking abroad as well! Overall the simplest card to apply for - no special requirements on where you bank, no charges anywhere worldwide, and a simple application process. Purchases No additional charges worldwide (as Mastercard don't levy the fees VISA do) Cash Advances Avoid using the Post Office Mastercard for cash advances. If you do cash advance fees will be charged at 2.5% (min £3), and the cash advance interest rate is both significant and charged from the date you use the cashpoint - all of which can add up to a fee well over £10 if you withdraw €300, and clear the credit card a month later. With no foreign exchange fees or charges for cash withdrawals it sounds great - but preload the card so you can avoid paying interest on the balance outstanding. Purchases No currency loading or additional fees as it's a Mastercard which doesn't levy fees for using it abroad) Cash Advances Doesn't charge fees for cash advances either, but interest is charged from the date of withdrawals so preload the card. The interest rate is about half that charged by many of its competitors, meaning an interest charge of £3 – £4 for that £300 withdrawal repaid a month later. It you can't preload try to repay the debt as soon as you can rather than waiting for the bill to arrive. Firstly you need to be a Santander current account holder paying in at least £1,000 a month to apply for this card. Purchases No additional fees (its a Mastercard which doesn't levy fees for using it abroad) Cash Advances Unusually doesn't charge fees for cash advances either, but the interest rate for such transactions is a one of the highest across the cards featured on this page, so if you don't clear the balance for a month a €300 withdrawal it will cost you about £6.30 in interest. So basically don't use it for advances unless you are certain you can clear the card immediately (or better still pre load it so its in credit when you take out your cash!), or try to do so as soon as you get the chance rather than waiting for the bill to arrive. Purchases A complicated system here - you can earn credit for commission free tranactions abroad by using your card in the UK - you can make a £1 fee free purchase abroad for ever £5 spent here - and the tally is recorded on your statement. As we say complicated and if you use the card over your fee free limit it will cost you 2% in fees. Full details of the card are shown on our balance transfer pages, as it does have an attractiove 0% interest free period for new cardholders. Cash Advances A fee of 2.5% will be charged for the cash advance (min £3), and again one of the higher rates on this page. Fees for a €300 transaction paid back a month later would be about £13.20, and for a similar sized transaction outside Europe it would be around £15.90. Pre Paid Foreign Currency Credit Cards Our two best buy cards are the Caxtonfx card and the Fairfx card. Both are available in Euros or US $ - and can be loaded at a pretty competitive rate (Fairfx normally has a slightly better rate, but Caxton doesn't charge for cash withdrawals so its a bit swings and roundabouts - both rates are normally better than the best exchnage raters you can get for notes). They can either used for purchases, or in the case of a Caxtonfx card at cashpoint machines cards free of charge (although in our experience some overseas machines, particularly in the US, charge a nominal fee as well). Useful if rates are falling as you can lock in your money at a higher rate now and spend it in the days to come (if of course you are a financial wizzkid who can predict the markets!). Both the main two cards are offered free of charge (charges apply elsewhere) through moneymaxims pre paid currency credit card article, and given the prepaid nature of the card credit checking is far less stringent than for 'real' credit cards. They can be easily topped up abroad from your bank account if you have access to the internet. Although these cards do not offer the same consumer protection that credit cards do - if the Bank or Building Society that issues the card runs into difficulties your cash could be at risk - Newcastle Building Society who administer both have said rhat any funds on them are 'ringfenced' for customers. However if you are looking at buying an uncomfortably larger amount of money we recommend you consider getting a few cards from various suppliers and spreading it between them. Please ensure you check the wording of any credit card agreement carefully - any details contained in this article are intended as a guide, but are not guaranteed to be correct, and moneymaxim cannot accept any liability for errors. Moneymaxim – making money go further Moneymaxim
always recommend you take independent financial advice before acting on any
article. |