Research reveals holidaymakers are still relying on credit cards, last month risking £58 million in extra charges while abroad. Find the best cards for foreign and UK usage with the Moneywise credit card round-up.

 

Research by Travelex reveals holidaymakers are still relying on credit and debit cards, last month risking £58 million in extra charges at ATMs and in retail outlets abroad. This is the equivalent of sending 20,000 families of four on a week-long holiday to the Med.

Foreign usage

With summer here, many of us will be counting down the days until jetting off to warmer climes. However, you could find yourself out of pocket if you don’t use the right card. Most providers will charge a foreign loading fee - typically 2.75% - on all purchases overseas, not to mention a cash withdrawal fee.

You can cut out these charges completely with the Abbey Zero card.At 18.9% APR on purchases, it has no foreign exchange loading anywherein the world and you won’t be charged a fee if you want to withdraw cash either. However, the interest rate if you want to withdraw cash is 25.9% APR and your withdrawal limit is £300 a day.

Nationwide's Classic Visa has an APR of 17.9% or 22.9% for cash withdrawals. The fee for using a cash point is 2.5% (minimum £3) and the withdrawal limit is £250 a day. Again, Nationwide will not charge you a foreign usage fee.

Another foreign usage fee-free credit card is the Post Office’s Classic MasterCard.It has no foreign exchange loading fee, and a typical APR of 17.9%. Again, a £3 or a 2.5% fee applies if you withdraw cash from an ATM, on top of the respective cash withdrawal charges of 24.94% APR.

As with any credit card, remember it can take up to four weeks to get approved and receive it through the post. So make sure you plan ahead if you are off on your travels anytime soon.

0% on purchases

New figures show that the average APR on balance transfer deals - once they expire - has increased from 15.35% in January to 16.1%.

If you are coming to the end of your 0% interest introductory period it is financially worth spending a bit of time finding a new card.

Sean Gardner, director of MoneyExpert.com, says: "Credit card companies continue to offer good, lengthy zero per cent deals on balance transfers, and customers should continue to take advantage of them."

So, what’s out there at the moment?

If you are looking for a card that gives an interest-free introductory offer on purchases, the Halifax All in One MasterCard includes 0% on all purchases for 10 months, reverting to 15.9% once the introductory period ends. For all cash withdrawals, you will be charged 23.95% APR.

This card also offers 0% on balance transfers for six months, although a handling fee of 3% applies, and customers can receive loyalty points on purchases.

Halifax offers up to 59 days' interest-free credit if you pay off your balance in full each month.

Elsewhere, the Lloyds TSB Advance MasterCard offers 0% on purchases for six months, after which time the APR reverts to 11.9%. Cash withdrawals will cost you 27.9% APR, and there is no interest-free period.

If you need to transfer a pre-existing balance onto this card, then Lloyds TSB will charge you a 3% fee and this balance will attract interest of 4.9% for 12 months. However, it is worth bearing in mind that payments will reduce the balance amount first.

Capital One's Platinum Card has a 16 months 0% offer on purchases and 0% on new purchases until 1 November 2009, subject to a 3% fee. After this time, the typical APR will revert to 14.9%. Cash withdrawals will also attract a 25.9% rate of interest. You'll receive 56 days interest-free period. 

Alternatively, PayPal’s MasterCard also offers 0% on all purchases for six months, and charges 12.9% APR after this period. You can also get 0% on balance transfers with this card for nine months, although a 2.5% fee applies.

This card offers cashback when holders shop online.

First Direct's Gold Visa offers 0% on purchases for 12 months and 5.9% on balance transfers for five years, after which point the rate reverts to 16.9% APR. However, you won't be able to transfer balances from HSBC, HFC Bank or M&S Money, as these brands are partof the same group. A 2.5% fee applies to balance transfers.

0% on balance transfers

Some 0% purchase credit cards also offer interest-free periods for balance transfers. However, if you do not intend to make any new purchases, you might find you’re better off opting for a 0% balance transfer deal as these tend to offer you longer to pay off the balance before interest kicks in. Many also offer interest-free periods for new purchases too.

Virgin Money’s MasterCard offers 0% interest on balance transfers for the first 15 months from the date of issue. Although there is no annual fee, a balance transfer fee of 2.98% (minimum £3) applies. The card also offers 0% on all new purchases for the first three months from the date of issue, after which time the APR reverts to 15.9%.

Virgin offers customers other incentives with this card, such as discounts on Virgin products and services. These include money off Virgin trains, holidays, mobiles and wine. You’ll also get 50 days' interest-free on card purchases as long as you pay your statements off in full and on time each month.

Egg Visa also offers 0% on balance transfers until 1 September 2009 after which time the APR reverts to 16.9%. Purchases are interest-free until 1 September 2008. Again, a balance transfer fee of 3% applies.

This card also offers customers an “anniversary” interest-free period. This means that balance transfers are interest-free for up to five months for transfers made in your anniversary month in June 2010 and June 2011, plus a 2.5% fee. However, bear in mind that between this time and when your initial 0% introductory rate expires you face paying an APR of 16.9% on outstanding balances.

Barclaycard OnePulse only offers 0% on balance transfers for 14 months, but its APR is lower at 14.9%. The balance transfer is 2.9% (minimum £7.25) and purchases are also interest-free for six months. This card also offers 0% on purchases for six months from the date you take out the card.

Another benefit of this card is that Oyster customers can use it to travel around London. Plus, OnePulse offers a cashless feature meaning you can pay for items under £10 without having to put in your pin number.

Capital One offers 0% on balance transfers and purchases until 1 October 2009, subject to a 3% balance transfer fee. This card also comes with free identity theft service and has a typical APR of 12.9%. For cash withdrawals, you'll pay an APR of25.94%. Or you can opt for 0% on balance transfers until 1 November 2009, but for this extra month you'll pay a higher APR afterwards of 15.9%. This card does, however, offer 0% of purchases until the same date.
 
Standard rate credit cards

If you just want a credit card that doesn’t require you to keep chasing introductory offers, then opt for a standard rate credit card.

Barclaycard Simplicity Visa has an APR of 6.8% for purchases and balance transfers, or 15.8% for cash withdrawals plus a 2.5% fee. You’ll get 56 days' interest-free on purchases if you pay the balance off in full and on time each month.

Barclaycard also offers a Platinum Credit Card that offers 0% on purchases for three months and then a typical APR of 14.9%. Cash withdrawals will cost you 27.9% APR, and balance transfers 8.8% APR. You'll get 56 days on purchases interest-free as long as you pay in full and on time each month for the first six months.

Capital One's MasterCard has an APR of 8.5% for purchases, or 25.94% for cash withdrawals plus a 3% fee. You will receive 56 interest-free on purchases if you pay the balance off in full each month.

Or Intelligent Finance's FlatRate MasterCard has an APR of 8.9%, or 22.95% for cash withdrawals plus a 3% fee. You’ll also get 59 days' interest-free as long as you clear your balance each month. 

Finally, the Co-operative Bank Clear Visa charges 12.9% on both purchases and balance transfer, but there is no charge if you ever need to use an ATM. You will, however, pay 12.9% APR on cash withdrawals. You’ll get 59 days' interest-free if you pay off the balance each month, and this card offers up to £250,000 free travel accident insurance if you use it to pay for your tickets.

Cashback and rewards

Finally, if you are savvy with your credit card and always manage to pay off your balance in full each month, using a cashback credit card will reward you for spending.

The American Express Platinum MoneyBack credit card pays cardholders 5% - or 5p for every £1 spent - on up to £4,000 worth of spending during the first three months. After the deal ends, the card then reverts to 0.5% on spends up to £3,500, 1.00% on £3,501 - £10,000 and 1.5% for spending beyond this.

The card has an APR of 18.9% for purchase or 27.9% for cash withdrawals. You’ll also get 56 days' interest fee if you pay off your balance each month.

The Barclaycard Platinum Cashback MasterCard offers an introductory 4% cashback until 31 July on spends up to £750 per month. After this, the card gives 0.5% on spends up to £6,000. The APR is 16.9% or 27/9% for cash withdrawals.

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