Best debit cards, credit cards and foreign exchange

• Median foreign transaction fee faced by debit card holders is 2.75%
• For credit card holders the typical fee is higher at 2.95%
• Specialist travel credit and debit cards won’t charge you for spending abroad
• We take a look at the best options currently available to Britons 

Many Britons will be heading abroad this summer – even if that means braving airport queues and potential flight cancellations.

However, with the cost of living crisis still raging on many may also be looking to cut unnecessary costs where possible.

Finding the cheapest deals for flights and accommodation are the most obvious ways to do just that.

While many are used to doing this, the ‘boring’ parts of trips can often get left behind – such as ensuring you have a credit or debit card that doesn’t charge you through the nose when using it abroad.

Most debit and credit cards come with a non-sterling transaction fee and cash withdrawal fee for every time you use your card abroad.

This fee includes the currency conversion charge imposed by the card associations such as Visa, Mastercard and Amex and the administration fee imposed by the banks.

The median foreign transaction fee faced by debit card holders is 2.75 per cent according to Fairer Finance, while credit card holders can typically expect a charge of 2.95 per cent.  

For example, those with an HSBC debit card can expect to face a 2 per cent fee for withdrawals with a minimum charge of £1.75 and maximum charge of £5 for each transaction. They will also face a 2.75 per cent currency conversion fee on top.

Someone with HSBC’s Rewards Credit Card Mastercard will face a 2.99 per cent transaction fee every time they use their car abroad.

A typical debit card charges £11.88 when shoppers withdraw £250 in cash abroad, according to analysis by Moneyfacts, while some credit cards can charge £14.95.

Purchases can be costly too, for just a £50 spend a typical debit card can charge £1.38 and a credit card can charge £1.50, according to Moneyfacts. 

Withdrawing cash using a credit card should be avoided as it often begin charging you interest at its APR immediately meaning costs can quickly escalate.   

However, aside from cash withdrawals, credit cards also have their advantages.  

Most notably, they offer greater protection on purchases you make under section 75 of the Consumer Credit Act – even for foreign transactions.

This affords you protection when buying items between £100 and £30,000 and allows shoppers to make a claim against their credit card company to get their money back if a retailer or trader lets them down and refuses to honour the contract.

However, as you’ll likely need to a card that allows you to pay and withdraw freely without the threat of incurring high interest charges, a debit card may be most sensible.

You don’t have to worry about switching or compromising your current bank account. You can just set up a secondary account that you can use when travelling and transfer travel money into it when you go abroad.

With all this in mind, we take a look at some of best credit and debit cards for those considering holidaying abroad this year and might be a little out of the loop.

Best debit cards 

Chase Bank

Chase Bank is backed by US giant JP Morgan and launched in the UK in September 2021. 

Since then, it has hoovered up more than 2million customers. It was voted the best current account provider at the British Bank awards in both 2023 and 2024. 

This has in part been down to the plethora or perks that come with the account, including the fact that it has zero fees and charges when used abroad.

Its currency converter uses Mastercard’s exchange rate, and there are no additional transaction fees or mark-ups.

There are also no charges from Chase for cash withdrawals at ATMs anywhere in the world – unless of course the ATM is one that charges any withdrawal.

Chase allows its customers to withdraw up to £500 each day from cash machines, however, when travelling abroad it allows for a maximum of £1,500 to be withdrawn each calendar month.

Chase allows new customers to earn 1 per cent cashback on all eligible debit card spending during the first 12 months of having an account – this includes when spending abroad and of course when booking flights. 

There are no fees to open the Chase current account and for those worried about losing the card whilst travelling may like that is is a numberless debit card.

Instead, card details are stored behind a secure login on the Chase app, so customers don’t put their account details at risk if they lose their physical card.

Starling Bank 

Starling Bank’s current account offers both fee-free debit card withdrawals and card spending abroad.

Just like Chase, it passes on Mastercard’s real exchange rate, and doesn’t add anything on top. 

It does limit cash withdrawals to six each day, with a daily limit of £300, however – so it’s worth bearing that in mind if you intend to exceed that amount on any given day.

There aren’t many other perks that come with the account, but Starling has won huge acclaim for its customer service and app.

It was voted the best current account provider at the British Bank Awards in 2019, 2020, 2021 and 2022. 

Its current account can be downloaded through a smartphone app and can now also be managed online, and pays 3.25 per cent interest on up to £5,000. 

It offers instant spending notifications, compartmentalises spending into categories and lets account holders create dedicated ‘spaces’ for their savings.  

In terms of overdraft, the bank charges interest rates of 15 per cent, 25 per cent and 35 per cent for arranged overdrafts depending on a range of factors including after an assessment of your credit file.

First Direct   

First Direct’s current account offers fee-free debit card withdrawals and card spending abroad. 

It previously charged a 2.75 per cent non-Sterling transaction fee and a 2 per cent non-Sterling cash fee, but scrapped these in June 2023. 

There is a daily cash withdrawal limit of £500. 

First Direct is currently running a £175 switching bonus for new customers who mover their current account to a First Direct current account through the Current Account Switch service.  

Metro Bank Current Account  

Metro does not charge customers for debit card payments or cash withdrawals anywhere in Europe.

However, for those looking to travel further afield, this may not be the best option.

In countries outside of Europe, there will be a non-sterling transaction fee of 2.99 per cent on purchases made, as well as a non-sterling cash fee of £1.50 on top of a 2.99 per cent transaction fee for any cash withdrawals from ATMs.  

The Metro account offers arranged and unarranged overdrafts with a fairly high interest rate of 34 per cent APR.

But in any given month, Metro says it will never charge you more than the monthly cap of £60 for charges relating to an unarranged overdraft.

Monzo current account

Monzo customers can use their debit card for free when abroad.

The hot coral card comes with no exchange rate markup, but you can only withdraw £200 free per 30 days (when outside the EEA) and anything over that comes with a 3 per cent charge.

For a £5 monthly fee, Monzo customers can opt instead for the Monzo Plus account which will enable them to withdraw up to £400 for free, anywhere abroad, each month.

For those concerned about the interest they might be charged when dipping into their overdraft, Monzo offers rates of either 19, 29 or 39 per cent, determined by your credit score.

Best credit cards 

Halifax Clarity credit card 

This card has no extra charges for spending abroad, and does not charge for withdrawing cash anywhere in the world. 

There is also no annual fee – so there are zero extra costs as long as you pay off your balance in full every month.

While there is no fee, interest is charged immediately at the card’s standard rate of 28.9 per cent on cash withdrawals and spending abroad. You can minimise the cost by repaying in full as soon as possible or avoiding withdrawals altogether.

Depending on your credit score, applicants may be given a higher interest rate of 27.95 per cent when withdrawing cash. In either case, it’s crucial to pay this off to avoid being charged daily.

You will be charged £12 if you pay your balance late, have a payment returned or go over your limit. 

Barclaycard Rewards card

There is no annual charge and no fees when using the card abroad, and you’ll be able to withdraw cash from an ATM without any charges.

The card comes with 0.25 per cent cashback on your everyday spending. The cashback is paid directly into your account. This will be credited annually to your statement or on your request.

You can also get up to five months of Apple Music, Apple TV+, Apple News+ and Apple Arcade for free, with your new Barclaycard – although this continues as a paid subscription after trial.

Watch out for: Remember to pay it off any cash withdrawals right away or you’ll be stung with a 22.9 per cent APR. 

Late payments will incur a £12 charge, but it will not charge this fee more than four times in a year.

Zopa credit card

The Zopa credit card does not charge a foreign transaction fee when used abroad.

Zopa does however charge a fee of £3 per cash withdrawal from an ATM, regardless of whether the customer is in the UK or abroad.

It will also charge interest daily on cash withdrawals, so it’s vital to pay this off as soon as possible.

It also charges a missed payment fee of £12 if you don’t make your minimum monthly payment on time.

Those who fail to pay it off in full each month will be subject to a rate of 34.9 per cent.

Santander All in One credit card

On top of having no transaction fees on any purchase made abroad, this card also offers 0.5 per cent cashback on spending – although there is a £3 monthly fee associated with it. 

Customers should be aware that they will incur a 3 per cent charge when withdrawing money from an ATM.

Another benefit of this card is that it charges 0 per cent interest on balance transfers for 15 months from account opening, with no balance transfer fee and 0 per cent interest on purchases for 15 months from account opening.

A balance transfer credit card allows people to pay off debts by transferring everything they owe over into this card – up to the maximum credit limit.

At the end of the 0 per cent period, interest will be charged on any outstanding balances and new purchases at the standard rate of 21.9 per cent per annum.  

For those who make a a late payment they will incur a £12 charge whilst a £12 fee also applies for those going over their credit limit.

The NatWest Credit card   

There is no annual fee and you won’t pay foreign transaction fees when you use this card abroad.

The card comes with a low APR of 12.9 per cent which could come in handy if you forget to pay it off.

However, your actual credit limit and APR may vary depending on our credit assessment of you. It may be that you are given a higher APR of 19.9 per cent.

For those who make a a late payment they will incur a £12 charge whilst a £12 fee also applies for those going over their credit limit.