Practical tips to help you improve your credit rating and avoid expensive high interest loans
Going abroad can hit you with unexpected credit card fees and variable exchange rates.
There is a way to avoid this and that’s by using a travel credit card to ensure you are getting the best possible exchange rate.
For more specific detail about the best (and worst) cards available please see Money Saving Expert but here’s a quick guide.
Travel credit cards will not incur any fees when you spend money abroad whereas if you use your normal debit card you could find yourself paying lots of hidden charges including:
To see how ‘an EU ban on credit card charges could make your holiday more expensive’, please click here.
Research from Money Saving Expert compared the actual cost of spending €1,000 and found:
That’s a difference of £100 or around 13%.
You must pay the balance of your travel credit card off every month or any savings you do make will be meaningless.
There are other advantages to using a credit card over a debit card including the fact that they are very easy to apply for and don’t require a change of bank or new account. If you only want to use it for one holiday you can simply cut it up when you get home!
Credit cards also give you protection against anything going wrong with your purchases; much easier than trying to take something back you bought when you were abroad!
You will, however, pay fees on cash withdrawals on all credit cards so make sure you read the small print.
If you are given the option of paying your bill in pounds or euros always chose euros. If you chose pounds the retailer will be choosing the exchange rate and you will not benefit from your card’s low rates.
If, however, you are using a normal credit or debit card check the ‘non-sterling’ fee at the cash machine. If this is under 2.5% select pounds.
Money Saving Expert has a great guide to the worst cards to use abroad and we strongly recommend you take a look at this. Some charge as much as £1.50 per transaction which can add up if you’re buying drinks, snacks and other low-value products on a daily basis.
Whilst we might be all around great guys to write a post like this, our day job is helping people (with a damaged credit history) to find affordable finance.
Not relevant no problem, though we hope we helped you so you do not get tripped up by those pesky travel credit card charges ?.