SMART TRAVELLER USING CREDIT CARDS ABROAD

How to avoid paying over the odds when on the road

Most frequent travellers know the basics about spending overseas – withdraw cash in decentsized amounts, don’t change money at the airport unless it’s an emergency, and look for a credit or debit card with good transaction rates.

Still, according to research by fintech company Centtrip, UK businesses waste billions on foreign-exchange fees each year, with employees losing out on as much as £51 million by not including currency conversion costs when submitting expenses.

The amount you pay overseas is based on the exchange rate set by Mastercard, Visa or American Express, plus the additional fees your bank or the ATM adds.

When using a credit card, it is important to look out for how much you’re being charged in foreign transaction fees on purchases (which can be variously labelled non-sterling transaction charges, conversion fees or loading fees). On both credit and debit cards, these can be up to 3 per cent, creating a fair bit of additional spending over the course of a trip.

Also pay attention to the fees that your bank slaps on when you take money out of an ATM, which are generally hefty with a credit card. These can include a cash withdrawal fee, foreign usage fees and interest.

And while you usually only pay interest if you don’t clear your bill in full at the end of the month, when the money is spent overseas some cards will immediately charge you interest, often at high rates. So which will give you the best deal? We compared some.