With many of us jetting off on holidays for the summer, Nicolas Frankcom, money expert at uSwitch.com, shares his tips on the best credit cards to make the most of your money this summer: "Choosing the right credit card to use when on holiday could save you a small fortune on fees, with the best cards offering commission-free purchases abroad, cashback on spending, and lower interest rates.
Have you got your card sorted yet?
"One thing to compare is free overseas spending vs rewards and cashback. While airline cards typically won't give you free overseas spending, they will give you rewards for flying on certain airlines, so it's important to weigh up how you'll be using your card. You may want one card for booking your holiday and then a separate card to use when you land."
The top cards for using abroad:
Nationwide Select Credit Card
The top choice is from Nationwide - it does not charge any fees for transactions or overseas usage, and comes with 15 months 0% interest on purchases. It also offers the lowest APR, no annual fee, and cashback on purchases made in Sterling. The one snag is that you have to be an existing Nationwide customer - but the Nationwide FlexDirect current account offers 5% interest on balances up to £2,500 and a 12-month fee-free overdraft, so it could be worth switching to.
Post Office Platinum MasterCard
The Post Office Platinum MasterCard is a strong option for those who either don't have, or don't want to open, a Nationwide account. As well as no mark-up on foreign currency transactions worldwide, there is also 0% on balance transfers for 18 months with no transfer fee (initial fee of 2.89% is fully refundable) for anyone not wanting different cards for home and away,. However, it won't give you an introductory interest free period on purchases and it has a slightly higher APR (17.8%) if you can't clear your balance.
Lloyds Bank Avios Rewards Card
The Lloyds Bank Avios Rewards Card is a great option for those who travel regularly. It offers two separate cards - a MasterCard and an American Express. Both cards allow you to collect Avios points to spend on treats such as flights and hotels. The Amex card allows you to collect Avios points faster, and the MasterCard as back-up for when they don't accept Amex. There are no foreign transaction fees and you will earn double Avios points in your first six months. However there is a £24 monthly fee and a higher representative APR of 23.7% APR (variable) to consider.
aqua Reward MasterCard
The aqua Reward MasterCard is a strong choice for those with a poor credit rating, or limited history of credit, who may not be eligible for some of the other cards. It starts with a credit limit of £250, going up to £1200, and offers 0.5% cashback on all purchases. It's good for travel because you won't be charged a foreign currency transaction fee, but it does have a high APR of 34.9% so be careful to pay off your balance in full each month.
American Express Preferred Rewards Gold Card
The American Express Preferred Rewards Gold Card can be a great card as long as it's used in the right away. Crucially it's a charge card, so you have to clear the balance each month, but if you can do, there are some great perks to be had. The insurance cover includes accident insurance and travel inconvenience insurance for things like trip cancellations, delays, and delayed luggage. It also offers two complimentary VIP lounge passes a year and double rewards points on spend abroad. Watch out though - there is a 2.99% overseas usage fee and, although the first year is fee-free, there is a £125 annual fee after that.
Nicolas Frankcom also recommends considering the following when taking out a credit card to travel abroad with:
FX fees
If you're being offered the MasterCard or Visa daily exchange rate you're generally getting some of the best rates available, but check if you will be charged a mark-up fee by your credit card company for using the card abroad. You can get a good deal on credit cards that don't do this, but keep in mind their exchange rate might be less in your favour and a lot of them may not offer the same perks.
Acceptance
Card acceptance may be limited, depending on where you travel. It's always a good idea to make sure that you have your debit card with you as a back up to withdraw money from an ATM, as you should never use your credit card for that. Generally Visa and MasterCard are accepted globally and Amex tends to have better acceptance in big cities or at major hotels, resorts and shops in major tourist destinations.
Service
What happens if it all goes wrong? American Express products are consistently known for good customer service particularly in emergency or desperate situations while abroad. If you have a Visa or MasterCard it will come down to your credit card company. Always check the details with your card company - for example if you will only be covered if you booked your trip with the card you are using - and compare the options before taking the plunge.
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