Can I use my credit card abroad?

In a word, yes! You can use your credit card abroad. But it’s important to check with your specific provider as there can be different fees and charges to consider. Let’s take you through everything you need to know about using your credit card abroad.

How do credit cards work abroad?

Using your credit card abroad is much like using it at home, except you may encounter some additional costs. 

Other than the standard fees linked to your card, there are two charges to be aware of when using your credit card abroad:

Non-sterling transaction fees

Most credit (and debit) card issuers charge a fee for purchases made abroad in a foreign currency, and it’s usually around 1-3% of the transaction value. 

This may not seem like much for one purchase, but considering the amount of purchases you’re likely to make when travelling, these charges can quickly add up.  

Don’t forget to factor in the standard credit card interest you might need to pay on any outstanding balance at the end of the month. 

There are options to apply for a credit card specifically for travel, which usually won’t charge foreign transaction fees. Just keep in mind that a new credit card can take anywhere from one to two weeks to arrive, so it’s important to make your application in advance.

Cash withdrawal fees

When travelling, withdrawing cash with your credit card can be more expensive than swiping or tapping for purchases. Additional charges can be imposed by the ATMs or banks themselves, and your provider may begin charging you interest on cash withdrawals immediately. So, while having some cash can be handy, travellers may prefer to make the bulk of their payments abroad by card, to avoid these extra costs. 

As with foreign transaction fees, there are cards that don't charge for cash withdrawals, although this tends to be the exception and not the rule. It’s important to check your card terms before you travel so you know exactly what to expect.

Benefits of travelling with a credit card.

Despite these fees and charges, credit cards are a popular choice for travel because of the benefits they offer that cash or debit cards don’t. These benefits include:

• Easier to use and easier to carry than physical cash. Credit cards let you pay directly, without having to sift through cash, finding different notes and coins when you buy something. 

• Added safety. In most cases, cash lost or stolen abroad is gone forever. Using a credit card when travelling, on the other hand, means that you can block the card fairly quickly and easily, if you lose it, avoiding loss of money.

• Travel credit cards afford you the potential for rewards. Travel credit cards often allow you to earn points toward future travel or accommodation. This could include perks like extra checked baggage, airport lounge access and or discounted fares. 

• Protection. Credit cards provide card protection under Section 75 of the Consumer Credit Act. This means that goods and services with a value of between £100-£30k bought on your credit card are protected if the product you bought has a problem, is undelivered or mis-sold, or if the seller has stopped trading. 

This protection also extends to holidays (subject to certain conditions). For example, if the travel company through which you booked your holiday goes out of business and the holiday is subsequently cancelled, card protection usually lets you reclaim these costs.

Credit card tips for before you travel

Before you leave for your trip, here are some credit card tips that can help you be better prepared.

1. Checking expiry dates

The last thing you want to be dealing with on the eve of, or during, your time away is an expired card. So it's a good idea to check that your credit card won’t need to be renewed while you're out of the country. While some issuers automatically replace your card three to six weeks before your current card expires, it’s important to factor your provider's timeline into your holiday prep.

2. Informing your provider 

Thanks to modern fraud technology, many credit card issuers can now recognise when cardholders are travelling, but it’s best to check if your card provider does so. If not, it’s helpful to let your credit card provider know when you’re going to be away. That way, your card isn’t at risk of being blocked for suspicious activity when you use it abroad. 

Either way, it's important to note your card issuer's contact details in case your card is lost or stolen. Often, this is a toll-free number that you can use in an emergency. 

3. Consider setting up direct debits

As always, it's important to keep up with your credit card payments even when on holiday. Some travellers find it helpful to set up direct debits for these and other bills while they’re away.

4. Make sure you know your pin

Some providers recommend using your chip and PIN function to pay for your first purchase abroad as an added measure of security. You might also encounter merchants who do not offer contactless payments. If you’ve forgotten your PIN, you may be able to set up a new one online or in your banking app before travelling. 

Summary: Using your credit card abroad

There are benefits to using a credit card abroad. It's typically safer than carrying cash and cheaper than withdrawing it at an ATM abroad. However, many credit and debit card providers charge additional fees for purchases made abroad, so it’s important to keep these costs in mind.

Many card issuers offer specific credit cards for travelling that can offer perks, rewards, and lower transaction fees. So if you’re planning to travel abroad, it may be worth looking into these options. Credit cards can take a few weeks to be issued, so it’s important to consider this timeline if you choose to apply for one before you go. 

Before travelling, there are a few precautions you can take to help make spending abroad as hassle-free as possible, such as informing your credit card provider about your upcoming travel, checking your credit card’s expiry date, and double-checking your PIN.