Monzo, Starling, Tandem, Halifax Clarity and more compared for overseas spending.
If you’re heading out of the UK then one of the best ways to spend money is to use a specialist card. Use the right one and you could be getting near perfect exchange rates. Use the wrong one and it could be hit with extra fees and charges on every transaction.
There aren’t a huge number of options, and though I’ve accumulated around five cards I could use, I tend to just use one for the bulk of my spending, and another if I need to get cash out. That’s two out of 14 debit cards, and three out of six cards. The vast majority of my credit and debit cards just aren’t suitable for spending abroad.
Which means it’s more likely than not that your existing debit or credit card is going to be an expensive way to spend abroad. It’s worth having a look online to see what your bank charges. If you already have a fee-free card then great. There’s probably no reason to switch to one of those listed below. But for most of you, it’s well worth opening up an account to get your hands on one of my top picks below.
My top travel credit cards
Specialist credit cards can be great for overseas spending as long as you pay off the debt before any interest is charged.
Even with these fee-free cards you’ll likely get charged interest on cash withdrawals straight away. If you can, clear the balance on a daily basis to avoid these extras. If you can’t get online then you can set up a standing order before you go.
With all credit card applications do make sure you check your eligibility first if you can.
Tandem credit card
On my recent trip to New York I only used my Tandem credit card. I not only got charged an exchange rate with no added extras or “load fees”, but I also earned 0.5% cashback for every £1 spent.
I also really like that you get instant notifications of how much you spend – though watch out for data roaming charges outside Europe. It’s app only – meaning you open and manage your account from your phone.
Halifax Clarity credit card
This is the card I’ve had for years and I’ve only stopped using it because of Tandem’s cashback. But it’s a solid card and well worth looking into if you’d like to go with a more established bank or want to go into a branch to apply.
Nationwide Select credit card
I’ve got one of these, and included it in my list, as it’s one of the few Visa cards which offers fee-free overseas spending, That shouldn’t be an issue for most people, but when we were travelling in South American in 2013 we found a few countries where it was useful having a Visa back up.
It’s only available to Nationwide customers, which isn’t a bad thing as the FlexDirect account is my top pick for current accounts. It is, however, a very bad card for cash withdrawals as you’ll get charged 2.5% or a minimum of £3 each time you use an ATM.
Barclaycard Platinum Cashback Plus credit card
Also a Visa card is this one from Barclaycard. I don’t have it as I’ve got the options above, but it’s a really good option if you’re starting from scratch as this one doesn’t charge any interest on cash withdrawals. You also get cashback – it’s 0.5% for the first three months then 0.25% after that until August 2023. However it’s not available for anyone with an existing Barclaycard.
My top travel debit cards
Unlike credit cards, you can’t spend what you don’t have with a debit card making them easier to manage for many people. You can also take cash out of an ATM without interest charges, though as you’ll see a couple do have monthly limits on your fee-free spending.
This is the second card I tend to use, but only if I need to take cash out. There are no limits for spending abroad or taking cash out (other than the daily cap you get with all debit cards), making it the best of the new breed of internet banks. Along with Monzo, you can only open and manage your account via an app.
Monzo has a better brand recognition than Starling, and people might wonder why I’ve put it second on my debit card list. The answer is very simple – you can only take £200 out of a cash machine abroad every 30 days.
Now for many people that’s not going to be a problem. I didn’t take out any cash in New York let alone £200. But if you’re going to countries where cash is still king (or at least more prevalent) or are away for a long trip you could reach that limit. If you do you’ll be hit with a 3% charge.
But if that doesn’t bother you, then you can also get a free fiver for opening a Monzo account! More details and the £5 referral link in my full Monzo review.
This isn’t technically a debit card, though it works just like one. It’s actually a smart card which links to your bank and credit cards in the same way you’d use Paypal or Apple Pay. However it is largely fee-free, even if the attached card you are using to spend isn’t.
This makes it a great back up card, or even your primary travel spending card if you can’t be bothered to go through the hassle of opening new accounts. There’s also no credit check, something only Starling Bank has in common.
As with Monzo there are monthly limits on spending and cash withdrawals before a fee is added, so do check those. There’s also a free fiver for signing up. Read my full Curve review for more details.
The best ways to spend when abroad
This video from series three of Shop Smart Save Money shows “how low you can go” with the different options for holiday spending
And this article breaks down how I spend when I go away