The currency card that’s not as super as it thinks...

THE charges for using credit and debit cards overseas are a perennial bugbear for travellers, particularly at the moment with the pound so weak against the euro and dollar.

Most credit-card providers sting customers with foreign loading fees, applying an exchange rate to transactions that is usually nearly three per cent worse than that set by Mastercard or Visa.

That may not seem much, but over a holiday it adds up: spend £1,500 on a card, and you’re forking out nearly £45 in fees.

On debit cards, you’re likely to be hit by a double whammy of charges. Not only is there the exchange rate loading fee of nearly three per cent, but when you pay for something you may well have to pay an additional flat fee (typically £1 to £1.50). And if you withdraw cash from an overseas ATM, there’s also almost certain to be a further fee – as much as £2 minimum with NatWest.

Pre-paid currency cards can work out better value than debit cards. However, the exchange rates they apply when uploading funds on to them often aren’t great, and, again, many impose fees when taking money out of cash machines.

All of which explains why Travelex’s new Supercard is arousing such interest. The card functions in an altogether different way from its rivals. Using an app on your smartphone or tablet, you link it to up to five of your existing Mastercard or Visa credit and debit cards. Then, when you spend overseas on the Supercard, it automatically deducts the amount from your chosen account without adding any fee, using Mastercard’s wholesale exchange rate.

It’s important to note that, to ensure your spending on the card is fee-free, you need to pay in the local currency. As with other cards, you may be offered the option by the retailer or bank to pay in sterling, but if you do it will carry out the transaction with a mark-up.

Supercard has other advantages. Unlike pre-paid currency cards, you have none of the palaver of transfer- ring funds on to it. And as the Supercard is linked to your existing cards, no credit checks are necessary.

If the debit or credit cards to which the Supercard is linked provide cashback, loyalty points or rewards, you’ll still earn these when spending with the Supercard.

Finally, the Supercard app, which you have to use to register for the card and manage it, is user-friendly. Among other things, it lets you keep easy track of your spending. The cost of purchases are spelled out in the local currency and pounds, and cheeky estimated savings are shown compared with paying directly with popular debit/credit cards that apply fees.

But despite these strengths, I’m afraid the Supercard isn’t flawless. The biggest drawback is that when you use the card to withdraw cash from an overseas ATM, you’ll be charged a 2.99 per cent fee. And while the Supercard is accepted worldwide, it may not be usable at petrol pumps or motorway toll booths, and unlike a credit card you can’t use it as a preauthorisation holding deposit on carhire bookings or hotel stays. Moreover, transactions aren’t covered by the very useful ‘section 75’ consumer protection you get when you pay directly with a credit card.

OTHER OPTIONS

THE Halifax Clarity Credit Card (halifax.co.uk) is one of the few credit cards with no foreign-usage exchange rate fees, so it’s great for settling bills and making purchases. For obtaining cash from ATMs, consider the prepaid Revolut card (revolut.com), which imposes no charges on withdrawals up to £500 a month. The pre-paid Caxton FX card (caxtonfx.com) also doesn’t charge for withdrawals.