July 6, 2018 5:17 pm Written by

How to use a credit card abroad

Are you planning to go on holiday soon, or intending to move abroad? You may be wondering whether or not to use the credit card you currently have in order to purchase things whilst away. Providing that you choose the right credit card whilst abroad, you could end up saving a considerable amount of money when it comes to fees. Here at Guarantor Loans, we take a look at how the charges work and how you can use your credit card whilst away in a savvy manner.

Can you use your credit card abroad?

It is possible to use almost any type of credit card abroad where they are accepted, meaning you can use it in shops, restaurants and cash machines.

Many holidaymakers decide to use their credit cards abroad due to the level of convenience they provide. For example, you are able to get protection on all your purchases made abroad due to Section 75, meaning that you have peace of mind when it comes to anything you buy whilst away. Furthermore, using your credit card abroad is less risky than deciding to take cash out with you, and they can easily be replaced and cancelled if the card ended up getting either lost or stolen.

The cost of using a credit card abroad


Make sure that you are fully aware of any fees you may be charged with the credit card you have. It may be worth investing in a new, overseas card if these charges are particularly high.

There are different fees you may end up having to pay if you use a credit card whenever you spend on it or decide to withdraw cash. However, you can still save money: there are a number of credit cards available on the market that comes without these fees (or at least, some of them) meaning you can save money whenever you spend on your card.

Remember that on top of interest and any other fees you have, you could pay the following:

Non-sterling transaction fees: this may be up to 2.99%

These are known as foreign usage fees, load fees or foreign exchange fees that you pay if you use a credit card to spend in a foreign currency. The fee you pay is also applicable to any online purchases you make that are not in sterling.

Cash withdrawal fees: depending on the credit card provider, you could be charged up to 5%

Deciding to use your credit card abroad to withdraw cash could end up being expensive. The cash withdrawal fee that you end up paying will be a percentage (usually around 5%) of the cash you end up withdrawing.

For example, if you decided to withdraw 250 euros, (with an exchange rate of 1.369) as well as a cash withdrawal of 5%, then you would end up having to pay in fees an estimated £9.13.

Interest on cash withdrawn: this may be up to 69.9%

It is worth remembering that if you withdraw cash on a credit card abroad, you will be charged interest as soon as you have done so. With many credit card providers, this tends to be at a higher rate. This means it is important that you pay off interest as soon as you possibly can, especially as in our examples, the total amount you would end up paying, including when it comes to interest and withdrawal charges for taking out 250 euros would cost you a staggering £222.65.

For example, if your credit card provider charged 69.9% on withdrawals abroad, and took out 250 euros (but then did not pay this credit card bill until you received the bill 56 days later) then you would end up being charged £30.91.

The exchange rate you receive


Exchange rates are prone to fluctuations and the company that processes your credit card transactions.

The exact amount you get per pound would be dependent on the exchange rate set by the company that is responsible for processing your card’s transactions (either Visa, MasterCard or American Express). These rates change on a daily basis and can be checked on any of these companies’ website.

How can I find the best credit card to use abroad?

As previously mentioned it is possible to get a credit card that is specifically designed to be used abroad. A number of credit cards offer:

  • No cash withdrawal fees
  • Lower rates if you do withdraw cash abroad
  • No transaction fees

How do I use my credit card abroad?

There are a number of things you should do if you want to use your credit card abroad.

Before travelling, you should:

  • Make sure that you have contact your credit card provider to tell them when you intend to leave the UK and the countries you will be going to. You can do this by logging into online banking, visit a branch or phone them. This is important to do, as if your bank suspects suspicious activity, they could end up blocking your card, which obviously, would be incredibly inconvenient when abroad
  • It is worth bringing a backup with you in the event that you lose your credit card whilst away. This could be through the form of cash, another credit card, travellers’ cheques or your debit card

Whilst travelling, you should:

  • If your card does end up getting blocked whilst abroad, contact your card provider immediately
  • Keep a track of all your spending whilst abroad to make sure you are not incurring high charges.  Make sure that you are regularly checking your online account, or by deciding to set up balance alerts by email or text
  • You should also make sure you contact your card provider if you end up losing your card or it gets stolen, to ensure that your card is immediately cancelled and so that no further transactions can go ahead.

Need a little extra help to fund that dream holiday? Why not follow this link and compare guarantor holiday loans.

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