- 1 MoneySuperMarket.com
- 2 The Best Travel Credit and Debit Cards (Updated 2017)
- 3 The best travel credit cards: Our Roundup
- 4 The best travel debit cards: Our Roundup
- 5 Essential tips for using debit and credit cards while travelling
- 5.1 1. Pay using a credit card whenever possible.
- 5.2 2. Never take the option of paying in your own currency
- 5.3 3. Inform your debit and credit card providers of your travels
- 5.4 4. Obtain at least one debit and credit card on each of the Visa/Plus and MasterCard/Cirrus networks.
- 5.5 5. Consider a credit card with included insurance
- 5.6 6. Keep backup cards in your hotel room
- 5.7 7. Bring $100 USD as backup cash
- 6 What is the best credit card to start with?
- 7 The best credit cards for people with bad credit
- 8 How to Build Credit with a Credit Card
The best credit card to use abroad is one that will save you a small fortune on fees and may include perks like commission-free purchases abroad, cashback on spending, and lower interest rates.
Get a specialist travel credit card and you can spend overseas knowing you've got a near-perfect exchange rate worldwide.
Easy, secure and greater protection than cash
A credit card can be a very useful thing to have in your purse or wallet while you’re away. It can be handy for spending – and if it is lost or stolen, you can cancel the card immediately and organise a replacement.
Protection is also provided on your purchases. If you spend more than £100 but less than £30,000 on your credit card and something goes wrong or isn’t as described then you can apply to your lender for a full refund.
However, there are a few traps to be wary of when using a credit card abroad.
With most cards, you’ll be charged a fee every time you use your card while you’re abroad.
Confusingly, this fee can be labelled in different ways by different card issuers, including foreign purchase, conversion or exchange rate fee, as well as a loading fee.
Some cards will charge you up to 3% every time you use them in shops, restaurants or anywhere to make a purchase. So, for example, if you stay in a hotel and the bill comes to the equivalent of £300, the card company could add £9.
The cards designed for foreign usage do not charge – compare a variety of credit cards before applying and check the terms and conditions for details on fees on overseas spending.
Don’t get charged for withdrawing cash
If you’re getting money out while you’re on holiday then it’s best to use a specialist credit or debit card to minimise any fees as some cards will charge on average 2.5% of the value every time you withdraw cash. In other words, withdraw £100 and the transaction will cost £2.50.
Remember, you’ll need to pay off the balance IN FULL before the end of the month, or you’ll pay interest.
If you take money out of an ATM using a normal credit card, you’ll start racking up interest immediately, from the point of withdrawal. There is no interest free grace period as with conventional purchases.
Avoid buying travel money with your credit card
Credit card firms see buying currency as taking out cash so you may get charged a cash withdrawal fee, or even a fee for using a credit card by the money changer.
If you’re buying currency always use a debit card (you’ll usually need to bring ID too), or withdraw cash.
When you’re using your card abroad you will be asked if you want the transaction to be in pounds or the local currency.
If you’re buying currency always use a debit card (you’ll usually need to bring ID too) or withdraw cash.
As a general rule, never pay in pounds as you could be charged by the bank/store for doing the conversion.
Smart Search allows you to find out the likelihood of your being accepted for a credit card when comparing your options. Importantly, it doesn’t leave a footprint on your credit file.
Smart Search can also provide ‘pre-approval9rsquo; on certain credit cards. This means you’re guaranteed to be accepted for the card you have applied for, providing you pass additional identity and fraud checks.
Alternatives for spending abroad
Prepaid currency cards: Top up the card with your chosen currency and then spend money when you’re abroad. These are a good option if you have a poor credit score and can’t get one of the top credit cards for overseas spending.
Watch out for fees, though, as some firms will charge you for topping up, spending and withdrawing cash.
Debit cards: While most debit cards will sting you for overseas spending there are a couple that don’t charge any fees for withdrawing cash.
Getting cash before you go: Our travel money and foreign currency comparison page can help you find the most competitive exchange rates on the market.
The Best Travel Credit and Debit Cards (Updated 2017)
No matter where you go or how long you travel, preparing for how you’ll pay for things overseas is one of the easiest ways to save money while travelling, period.
Currency exchange booths at airports and banks can be convenient, but a lot of your money goes towards exchange fees (e.g. $10 per exchange) and hidden commissions padded into poor exchange rates. With a bit of research and planning, you can save hundreds, if not thousands of dollars in fees over the long-term!
Credit and debit cards are the cheapest, easiest ways to get money and make payments overseas. Credit cards are accepted worldwide, and when you need cash, ATMs are abundant in every country. ATMs are internationally networked through the Visa/Plus and Mastercard/Cirrus networks. You enter your PIN and withdraw your cash just like you would at home, while the exchange rates are automatically handled by the banks.
However, some credit and debit cards are better than others! Hidden in the fine print, banks still try to secretly add commissions and fees to each payment or ATM withdrawal made abroad. Even if you don’t travel a lot, these fees add up quickly.
We’ve rounded up the best credit and debit cards around the world that minimize or eliminate these fees, putting more money back into your adventure funds!
The best travel credit cards: Our Roundup
Credit cards have various features that can make or break your travel savings. Ideally, these are the features to look for in a credit card:
- Foreign transaction rate of 0%
- No annual fee
- Competitive points or cash-back rewards program (at least 1% of the purchase price
- Included insurance on car rentals paid with the credit card
So what are the best credit cards for travel? Check your country below to see what’s best for you!
The best travel debit cards: Our Roundup
These are the ideal features to look for in a debit card:
- Foreign transaction rate of 0%
- International ATM withdrawal fee of $0
- Competitive points or cash-back rewards program (at least 1% of the purchase price)
Many banks around the world have come together to establish the Global ATM Alliance. If your card belongs to a bank in the alliance, you can make withdrawals from banks at other alliance member ATMs around the world without paying additional fees . Here’s our roundup of the best debit cards for travel.
Essential tips for using debit and credit cards while travelling
1. Pay using a credit card whenever possible.
Foreign ATMs can still inflate their exchange rates and charge withdrawal fees, but a direct credit card payment only involves the credit card you signed up with in your home country. And with a good points or cashback program, this beats any other method of foreign payment.
Bottom line? Always pay with a credit card, but NEVER withdraw cash from an ATM with one. Credit cards charge interest on cash advances from the moment you withdraw it at the ATM.
2. Never take the option of paying in your own currency
Card terminals at shops and hotels will often detect that your card is from another country and offer to bill you in your home currency. Never choose this option – always pay in the foreign currency! The exchange rate offered will be inflated by the card terminal, so if you’re using one of the credit cards recommended above, you will receive a much better exchange rate.
3. Inform your debit and credit card providers of your travels
Credit and debit cards are frequently being monitored by security departments for suspicious activity. If you’re from the U.S. and you make an ATM withdrawal in Thailand when they don’t know you’re overseas, this could appear suspicious to your bank, and your card might be locked the next time you withdraw. Give your bank or credit card provider a call and let them know when and where you’ll be travelling. Take it from us – you do not want to be stuck without cash and a useless card!
4. Obtain at least one debit and credit card on each of the Visa/Plus and MasterCard/Cirrus networks.
Even if you follow the advice in tip #3, it’s possible your card could get locked anyway. On top of that, it’s easy to find yourself in a situation where an ATM accepts only one network and not the other. For example, when we travelled in Japan, the only ATMs we could find that would even accept international cards were at 7-Eleven, and they only worked with cards on the Visa/Plus network. I speak from experience – there’s nothing more stressful than needing more cash and not being able to withdraw it, so be prepared and bring multiple cards on multiple networks.
5. Consider a credit card with included insurance
The jury is still out on whether it’s safe to rely on car and travel insurance that is sometimes provided by credit cards, and unfortunately, the only way to know for sure is to file a claim after the accident has happened. If you’re concerned about insurance, its best to be safe and purchase it from the car rental company, but if not, you might as well pay with a credit card that offers car insurance and hope for the best if you do end up in an accident.
6. Keep backup cards in your hotel room
If you lose all your credit and debit cards while overseas, you’re going to be in quite the pickle. Always keep at least one extra card back at your accommodation in case your main card or entire wallet is lost or stolen while you’re out.
7. Bring $100 USD as backup cash
When all else fails, U.S. dollars are the closest thing to a global currency that we have today. It’s the most commonly accepted currency, not only at exchange booths, but even at shops and restaurants in other countries. If there are no ATMs in sight or your cards have been stolen, an emergency backup of U.S. dollars will get you out an emergency situation.
Do you have another card recommendation? Know something we don’t? Write it in the comments below!
What is the best credit card to start with?
15% of your credit score is based on how long you’ve had credit. The longer you have a credit card, the sooner you start building your credit score, and the sooner your score raises due to older credit. A line of credit (a credit card, loan, etc.) won’t help your score until it has been open for at least 2 years!
“What credit card should I open first to start building credit?”
Honestly, which credit card you choose is up to you (don’t worry, I will provide links to recommendations) and really depends on your current financial and occupational situation, but there are definitely some criteria you want to follow when deciding:
1. As low of a monthly interest rate as possible
2. You want NO annual fees
3. You want to be able to change your initial credit limit
4. Have some sort of incentive for you (usually cash back)
5. Convenient payment option
The problem is that most credit cards that are advertised as good starter cards with crazy rewards like cash back and triple points also come with a very high-interest rate. What can you expect? You’re a credit baby. Banks make their money from your mistakes.
Certain types of starter cards help you avoid this high-interest rate:
1. Student cards –Generally low-interest rate cards that have low credit limits and minimal rewards
2. Secured cards – Lines of credit that require an initial deposit of some amount as collateral. If the credit limit is $500, your initial deposit will be $500.
The best credit cards for people with bad credit
If you have bad credit, start with a secured credit card. Flickr / JosГ© Manuel RГos Valiente
Poor credit makes it difficult to get approved for a credit card, but there's something out there for everyone.
We asked personal finance and credit card comparison site NerdWallet to highlight options for those with a lowВ credit score ( 300 to 629).
The roundupВ consists of secured credit cards вЂ” cards designed to help you build up your credit.
They require a cash collateral deposit equal to the credit line, generally have higher interest rates than unsecured cards, and don't offer as many rewards as regular cards. With responsible use and timely payments, you will eventually qualify for a unsecured (regular) card.
If you're looking to start or improve your credit history, consider one of these:
Capital One Secured MasterCard
Purchase APR:В 24.99%В ( APR will vary with the market based on the Prime Rate).
Why it's good:В If you're low on cash and looking to rebuild credit, this no-annual-fee card is a great option because it offers flexibility with the collateral deposit:В You don't have to make the fullВ deposit right away (just within 80 days of opening the account).В
You'll also have access toВ Capital One's Credit Tracker tool with this card, which lets you trackВ credit score improvement.
Purchase APR:В 18 .99%В ( APR will vary with the market based on the Prime Rate).
Why it's good:В You can get a high credit line вЂ” up to $10,000 if you can make a collateral deposit equal to that amount. This is rare for secured cards, and a high credit line will help to keep your credit utilization ratio low, which can help improve your score.В
Purchase APR:В 18 .99%В ( APR will vary with the market based on the Prime Rate).
Why it's good:В If you're hoping to upgrade to an unsecured card quickly, this card will give you that option with responsible use. After 12 months, US Bank will evaluate your account and determine whetherВ you're eligible to upgrade, which is a faster transition than most cards offer (typically it takes 18 months or more).
Purchase APR: Variable rate fromВ 8 .99 % to 18%.
Why it's good:В You have to be a military member or department of defense employee (or one of their family members) to qualify for this card. This cardВ earns rewards, which is rare for secured cards вЂ” especially ones with no annual fee. You'll get one point per dollar spent, and can redeem your points for merchandise and gift cards. В
Digital Federal Credit Union Visa Platinum Secured Credit Card
Purchase APR:В 11.50 %В ( APR will vary with the market based on the Prime Rate).
Why it's good:В You'll have to join Digital Federal Credit Union by making a one-time donation to an eligible charity, but it could be worth it for such a cost-effective card. TheВ zero annual fee and relatively low interest rate are hard to come by with unsecured cards.
How to Build Credit with a Credit Card
Wondering how you can improve your credit score? Using a credit card to build credit might be the solution. While credit cards often get a bad rap, they can be incredibly powerful credit-building tools.
Your credit score is based on a number of factors, including how long you’ve been creditworthy, how much debt you have and your payment history. Using a credit card can help establish a good track record in all these areas. Of course, building credit by using short-term debt requires a specific game plan and some serious self-control. Below, we’ll walk you through five key strategies for using credit cards to build credit. Together, these tips can help you get the score you want, without all that debt dragging you down.
Choose the Right Card, With the Right Fees
The best way to build credit with a credit card starts with choosing the best card. There are a million different credit card products available, and choosing the right one requires some research. If you focus on these four primary goals, you’ll narrow down your options pretty quickly:
- Find a card with no annual fee or a low fee that is waived for the first year.
- Find a card that offers a low-interest rate, especially one that offers a 0% interest introductory period of 12 months or more.
- Find a card that you can use anywhere, like a Visa, MasterCard, or American Express.
- Find a card that pays you back – either in airline miles, cash back, or transferable points.
The credit cards and interest rates that you qualify for will depend on a number of factors, including your credit score, annual income and employment status. If you have very bad credit or are just starting out, you may have fewer options. You may need to settle for a no-fee card that offers no perks but won’t cost you much either. You may even need to start with a store-branded card, rather than a Visa or other “anywhere” cards. Or, you can opt for a secured credit card. Secured credit cards work just like any other, but require an initial deposit as collateral. Your credit line is often limited to the amount of your deposit but may be higher, depending on the card you choose.
There are tons of options, so your first step is to find the card that is right for your current financial situation and minimizes costs.
Always Use Your Credit Card, But Never Use Credit
Of course, once you have your perfect card, you need to use it – but not too much. Use it for everything you normally buy: groceries, gas, travel expenses, eating out, bills. To build good credit with a credit card you need to use your card regularly to show you can be responsible with your spending. But there’s a catch – you need to use your credit card without actually taking on any debt. Carrying debt can result in paying more interest and increasing your total debt, which can lead to difficulty making minimum payments – both of which will damage your credit score.
This means resisting the urge to splurge on things you could not otherwise afford. You should aim to use your credit card like you would a debit card. A good way to maintain this habit is to keep track of how much money is in your bank account for spending and make sure you don’t put more than that amount on your credit card. You can even lower the credit limit on your card to ensure you don’t go too crazy. If you do get into debt, you can use our credit card calculator to help plan your journey out of debt.
Keep Your Credit Utilization Low
Sometimes there are big purchases that can’t really be avoided. Maybe your car breaks down and, without it, you can’t get to work. This is a situation where taking on some debt may be the only real option. However, you should do everything possible to minimize the amount of debt you take on. If you max out your credit card, your credit score can suffer.
Your credit score is, in part, based on your credit utilization ratio (CUR). This ratio is determined by comparing your total credit limit to how much debt you have. For example, if you have just one credit card with a $10,000 limit and you make a purchase of $1,000, then you have a CUR of 10%. You should always try to keep your CUR below 30%.
While you should aim to pay your full balance every month, this may not always be possible, like in the car repair example above. In this case, see if your card offers a 0% interest purchase period. If you just opened your card, you might be able to charge a large purchase to your account without paying interest for several months. Always make sure you know exactly what your interest rate is and when interest is charged before making any purchases that you won’t be able to pay off within a month.
Another important factor used to determine your credit score is your percentage of on-time payments. If you miss a credit card or loan payment, your credit score can go down. Even if you can’t pay your full balance in a given month, make sure you at least make the minimum payment before the due date.
One way to ensure you pay on time is to submit multiple payments throughout the month. If you pay off your balance weekly, for example, you’ll know that you’ve already made three payments by the time your credit card bill arrives. If you remember to use your credit card like a debit card, you should be able to simply pay-as-you-go and avoid any interest or late fees.
One last way you can improve your credit score is to keep your credit cards open. Even if you open another card with better benefits and no longer use your first card as much, keeping a credit card open for the long-haul can really boost your credit. Remember, credit bureaus look at how much total credit you have access to as part of the CUR calculation. So, if you close an older card, your total credit limit will go down and your CUR will go up.
Credit bureaus also look at how long you’ve been building credit. The longer you’ve held a card, the better. If the credit card carries hefty fees or is otherwise costing you money, then it’s likely not worth the trade-off. Any no-fee cards, however, should be left open for as long as possible to show how long you’ve been creditworthy.
A high credit score means more financing options and lower interest rates for big purchases like your home or car, even business loans. So the power of good credit should not be underestimated – if a Good or Excellent credit score gets you even a 1% lower interest rate, it can save you thousands of dollars over the course of a loan.
Credit cards are useful for a number of reasons, but may not get the credit they deserve when it comes to improving your credit score. Even if you have a very low score, it is possible to dig yourself out that hole by using a credit card wisely. If you follow these tips and set some guidelines for your spending, you can have a stronger credit rating sooner than you think.