Best debit and credit card for travel

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Holidaying abroad a decade or two ago meant having to buy foreign currency before you travel.

You could choose between cash, travellers’ cheques or prepaid cards but you’d need to buy at least £500 worth of currency to get the best exchange rate

These days, credit and debit cards are accepted in even the remotest corners of the planet.

There are exceptions, of course. Many restaurants in Berlin, for example, are still cash-only by choice.

And you’ll need cash to get around most developing countries if you don’t want to spend all your time in posh restaurants and swish hotels.

But there’s no arguing with the fact that a digital future is coming – and I personally think it’s a very good thing.

For one, there’s more choice than ever if you need a debit or credit card for travel. 

By the way, I also write Money Talk, a smart newsletter and website that helps you to save money and grow wealth. A version of this post originally appeared there and has been updated for Culture Explorer.

Do you need a separate card for travel?

Getting a debit or credit card specifically for travelling has two advantages.

The first is that it can save you money.

Unlike your average credit or debit card, a travel-friendly one won’t charge you an additional fee if you make a purchase abroad.

Withdrawing money from an ATM is also fee-free when you have a travel-friendly debit card.

Fees aside, the exchange rate offered by a travel-friendly card tends to be significantly better than the alternative because no commission fees are added by the bank.

It could therefore end up being cheaper than buying foreign currency from a Bureau de Change.

Should you go for a credit or debit card?

I personally prefer using a credit card over a debit card for normal spending because it offers an extra layer of financial protection.

Sometimes you’ll also get cashback or other rewards on top.

But when I’m travelling, I’ll always take both types of cards with me.

Benefits of a credit card

Credit cards issued in the UK are covered by the Consumer Credit Act.

Under Section 75 of this legislation, you can claim a refund from your credit card provider if things go wrong.

For example, if a hotel you booked is closed when you get there, you can turn to your credit card provider to get your money back if you’re unable to get a refund from the hotel itself or the travel agent you booked through.

There’s added security from the fact that a credit card is one step removed from your bank account.

So if someone fraudulently uses your credit card, the money isn’t coming out of your account straightaway.

Benefits of a debit card

In addition to my credit card, I’ll always take a debit card with me as well.

It’s not just acting as a back-up – debit cards come with their own benefits.

If you use a credit card to withdraw money from an ATM, you’ll end up paying more for it.

Even if your credit card doesn’t charge a fee for ATM withdrawals, it will charge interest on whatever money you take out because it counts as a cash advance.

A travel-friendly debit card will never charge these fees, although you should still look out for any fees that the ATM provider charges.

To make my debit card more secure, I use a separate bank account specifically for travelling.

I’ll move in the exact amount of money I want to withdraw when I’m ready to withdraw it so there’s no need to worry about losing my card.

Best credit card for travel

There are lots of credit cards that offer fee-free spending abroad, and these are the ones that I’ve included below.

They’re different from travel reward credit cards, which may or may not be travel-friendly.

A note on using credit cards: make sure you pay the balance off in full every month as otherwise any savings will be offset by the interest you’d have to pay and you might end up in debt.

Also, do take a moment to read the small print so you’re clear about what fees and interest you might incur.

And if you don’t want to unnecessarily affect your credit score, do take advantage of eligibility checks from the credit card provider before you apply.

• Lloyds Ultra credit card (Visa) – New to the market, the Lloyds Ultra credit card gives 1% cashback for the first year before dropping to 0.25% – but it’s only available to Lloyds customers.
• Barclaycard Rewards credit card (Visa) – A brilliant cashback credit card; what sets the Barclaycard Rewards credit card apart is that it gives you 0.25% cashback on your spending.
• Halifax Clarity credit card (Visa) – Designed with travel in mind, you don’t need to be an existing customer to apply for Halifax’s Clarity credit card.
• Natwest Travel Reward credit card (Visa) – You get just 0.1% cashback with the Natwest Travel Reward credit card but any eligible travel spending attracts a 1% cashback.

Best debit card for travel

You’ll need to open a current account to get a travel-friendly debit card, which can be a bit more onerous, but the good news is you only need to do it once.

The one bit of fine print you should look out for is caps on ATM withdrawals; some banks impose a daily cap while others have a monthly cap.

• Virgin Money M Plus debit card (Mastercard) – The Virgin Money M Plus debit card will give you fee-free spending anywhere in the world. The current account also benefits from a 1% AER in-credit interest rate on balances up to £1,000.
• Chase debit card (Mastercard) – The Chase debit card will give you 1% cashback on your essential spending. 
• First Direct debit card (Mastercard) – There are no additional benefits to using the First Direct debit card but having the current account will give you access to the bank’s top savings account.

Alternatives to credit and debit cards

Credit and debit cards are the most convenient way to carry money abroad but there are plenty of alternatives.

Prepaid currency cards

You could get prepaid currency cards like those offered by the Post Office and Travelex, for example.

These can be used in the same way that you use debit cards except they’re already in the local currency so you don’t need to worry about the exchange rate once you’re away.

I don’t like them personally because your money is effectively tied up in the card.

Topping them up is not always straightforward while cashing them out after you come back from your holiday is no joy either. 

Revolut

You could try Revolut instead.

It’s an electronic money institution that’s currently on its way to becoming a UK bank.

That means you can use it in pretty much the same way as you would a bank – simply top up your account and then use the debit card to spend your money.

Revolut will let you hold money in over 30 different currencies and change them back when the exchange rate is favourable.

The one downside is that on the free plan you have to pay to get a physical debit card.

Its virtual debit card is free and perfectly fine for making most purchases but you’ll need a physical card to withdraw money from the ATM.

There’s also a cap on fee free currency exchanges on the free plan.

Currensea

Currensea is a little different in that it works as a conduit for your current account.

Once you’ve linked your Currensea card to your bank, you can just use it like a normal debit card.

Currensea will automatically debit your current account in sterling so you don’t pay bank fees for a foreign transaction.

It’s worth noting that Currensea charges a 0.5% commission for its service, and there are additional surcharges after certain usage thresholds.

That means depending on how much money you spend, the exchange rate might not be as good as a travel-friendly debit or credit card.

Does it matter if it’s a Visa or Mastercard?

Most people don’t know this but Visa and Mastercard actually have slightly different exchange rates, and these change constantly.

In general, Visa tends to offer slightly better rates than Mastercard.

It won’t matter to most people though because the difference is something like 20p for every £1,000 spent – it’s not exactly a huge difference unless you’re spending a significant amount of money.

But if you want to put your mind at ease, you can see the Visa exchange rate calculator and the Mastercard exchange rate calculator for reference.

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