From 1 November 2010 the UK based Nationwide building society will charge customers for overseas use of their debit cards. There will be a 2% charge for allÂ purchases and cash machine withdrawals, plus a Â£1 charge per cash machine withdrawal. These charge for using debit cards abroad are still lower than many of their competitors, e.g. Halifax Reward current account customers pay a fee of 2.75% plus a flat Â£1.50 fee for any foreign transactions or cash machine withdrawals.Â I’ve been looking for a debit card for use abroad, with the lowest possible charges and fees, to replace my Nationwide debit card.
Spanish ATMs by cackhanded
FairFX Anywhere:Â low overseas charges in any country (also avoids Ryanair admin fees)
I reckon that the FairFX Anywhere Mastercard prepaid debit cardÂ is one of the best debit cards for use abroad, as it has a fairly low overseas usage charge of 1.4% on all purchases and 1.4% plus Â£1 flat fee for cash machine withdrawals anywhere outside the UK.Â You load the card in pounds sterling and conversion to the foreign currency takes place during your transaction, with no mark up on the exchange rate. As you have to pre-load the card before your trip, it can also be a good way to stick to your holiday spending budget. Europe a la Carte readers who are UK residents will have the usual Â£9.95 card application fee waived if they apply for the card using this referral link. You’ll need to select “Pounds Sterling Anywhere Card” in the left hand drop down box, then click the “New FairFX Card”. This will take you to another page, where you can change the amount you wish to load (pre-set at Â£100). You can read about this card’s fees and charges here.
CaxtonFX Euro Card: Great for use in the Euro Zone
If you plan to use your debit card solely, or mainly, in Euro Zone countries, the CaxtonFX Euro Card can be a good deal.Â You load the card (a Mastercard prepaid debit card) in Euro, at a competitive rate of exchange, with your cash locked in at the exchange rate prevailing at the time of purchase. There are no fees or charges for purchases or cash machine withdrawals made in Euro and no card purchase fee or monthly fees.Â But, you’d don’t get the benefit of avoiding paying the Â£6 per person per flight Ryanair admin fee with the CaxtonFX Euro Card.
Halifax Clarity: Great credit card for overseas use
I thought that the Halifax Clarity Credit Card was worth a mention, as it is a great option for use abroad. It has no fees for overseas purchases or cash machine withdrawals, but you’ll be charged interest on cash advances, which works out at around 1%, as long as you pay off your balance in full every month.Â If you hold a Halifax current account and at least Â£1000 is paid into your account every month, you can apply for the Halifax Rewards Clarity credit card which offers a Â£5 cashback reward if you spend at least Â£300 a month on your card. Â This Â£60 a year cashback should more than cover the interest you’ll pay on withdrawing some holiday cash when you’re abroad.
With a credit card, there’s always the temptation to spend more and if you don’t pay the balance off in full, you’ll end up paying a lot more in interest than you save in overseas usage charges.Â However, not everyone will want to open a current account with the Halifax, or be able to fulfil the minimum monthly funding criteria in order to get the Â£60 a year cashback on the Halifax Rewards Clarity credit card. You’ll also need to get a Mastercard prepaid debit card if you want avoid the Ryanair admin fees.
I couldn’t find a way of using debit cards abroad that is free of all charges and totally flexible, as prepaid debit cards mean that you can be left with some load on the card, which will have a cost to either spend in the UKÂ or convert back into pound sterling. You could get a CaxtonFX Euro card for use in the Euro Zone and a FairFX Anywhere card (with the Â£9.95 application fee waived if you use this referral link) for use in the the rest of the world.
Although most of my travel is within Europe, I do visit countries outside the Euro Zone on average twice a year, so I decided that I’d prefer keep it simple, by just sticking with a FairFX Anywhere card.Â However, if you get at least one of the above debit cards for use abroad,Â you’ll keep more of your holiday spending money for yourself.
If you already have a Halifax current account, or are happy to change banks and at least Â£1000 is paid into your account every month, then the you could even come up a few pounds ahead with the Halifax Rewards Clarity credit card, as long as you pay off your balance in full every month and make purchases worth at least Â£300 with your card every month.
Update 31 May 2013 – I still find the Halifax Clarity Card to be the best credit card for overseas cash withdrawals and transactions.
Warning and Disclosure
Please read the terms and conditions very carefully before you sign up for a card. I spent hours researching these cards but itâ€™s quite complex and there is a lot of small print. This post is based on my personal research in October 2010. Iâ€™ll receive a commission if you purchase a FairFX or CaxtonFXÂ prepaid debit card through the links in this blog post.