Post: #1

Last year, I traveled a lot and although I was with one of the cheaper banks for foreign card usage, I still racked up hundreds of £ on card usage fees.

It seems to be common knowledge on here that for Americans, the Charles Schwab account is the way to go to not pay foreign use fees but for Brits, there wasn’t something quite so convenient.

I’ll be traveling again soon and have managed to streamline my banking in a way that will let me avoid paying any fees.

What to consider

When looking for a bank card to use abroad, there are 3 main things that you need to consider.

1) Purchase fees. How much will the bank charge you to buy things with the card abroad? This is usually a percentage of the total cost of the item, around 3% to 5% with most banks.

2) Withdrawal fees. How much will the bank charge you to withdraw cash abroad? This is usually their purchase fee of 3% to 5% of the total amount that you are withdrawing plus a flat fee of £1.50 to £5 per withdrawal.

3) The type of card. Mastercard has better exchange rates than Visa across every currency that I have encountered. You can check the most up to date Mastercard exchange rates here and the most up to date Visa exchange rates here.

So ideally, you want a card that:
a) Has no purchase fees
b) Has no withdrawal fees
c) Is a Mastercard

Unfortunately, there are no cards that tick all three boxes but there are a few that tick 2 of those 3 boxes and if you can get 2 of those cards, you’ll have all 3 angles covered.

Without further ado, here are the banks and cards that I’d recommend

The banks and cards

1. Norwich & Peterborough Gold Classic Current Account



This is a current account and debit card with no fees for foreign purchases or withdrawals.

The only fallbacks of it are that it is a Visa card so does not have as good exchange rates as a Mastercard and that you have to add £500 or more to the account each month otherwise you will be charged £5.

I have set up a standing order to pay £501 per month from my main bank account to my N&P account to make sure that I do not fall under the threshold.

Even if you are not sure that you’ll be able to fund the account with £500 each month, it will still probably save you more money than your average bank account if you are abroad.

You can get your account set up totally online and do not need to visit a branch.

Pros:
- Zero foreign transaction and withdrawal fees

Cons:
- Is a Visa, not Mastercard
- You must put in £500+ per month or you will receive a £5 charge

Full details: http://www.nandp.co.uk/current-account/g...t-account/
Apply online: http://www.nandp.co.uk/current-account/a...nt-account


2. Halifax Clarity Credit Card



This is a Mastercard credit card with zero fees for foreign purchases.

It advertises itself as having zero fees for foreign withdrawals too but in reality, it charges you interest on withdrawals from the day of your withdrawal right up until your monthly bill is paid off.

However, it is slightly difficult to be accepted for. I have a full time job, have never been in debt but was rejected.

Pros:
- Zero foreign transaction fees
- Is a mastercard

Cons:
- You have to pay interest on withdrawals
- Is a credit card so there is the possibility of overspending and going into debt

Full details: http://www.halifax.co.uk/creditcards/clarity-card/
Apply online: https://apply.halifax-online.co.uk/perso...PClarity_1


3. Creation Everyday Credit Card



This has exactly the same features as the Halifax clarity card.

The upside is that it is easier to be accepted for. I applied online and it said my application had been rejected but then a few days later to my surprise, I received my card in the post that I can confirm is fully functional.

The downside is that it is not a known, trusted brand like Halifax.

I think it may have a better APR for if you do miss any payments too.

Full details: http://www.creation.co.uk/credit-cards/c...redit-card
Apply online: https://apply.creation.co.uk/microsites/..._everyday/

Honorable mention: Metro Bank



Metro Bank is Mastercard for it's debit and credit cards, which both offer free withdrawals and transactions in Europe. For outside of Europe, it is still cheaper than all high street banks at 1.9% transaction fee and 1.9% plus £1.90 for cash withdrawals.

You can walk into a branch and walk out with your card (whereas with the other ones mentioned, you have to wait for it to arrive in the post) so this may be the best option if your trip is any less than a couple of weeks away.

If you have the time to wait though, options 1, 2 and 3 are better.

Other considerations

Many foreign banks will charge a fee to use your foreign card in their ATM. This fee is unavoidable no matter which card you have.

However, do some scouting around and there will often be a bank which does not charge for foreign card withdrawals. Look out for banks which are popular worldwide. For example, HSBC does not charge fees in The Philippines whereas every other bank charges 200 pesos (~ £2) per withdrawal.

Tl;rd/conclusion

Open a Norwich & Peterborough Gold Classic Account for cash withdrawals.

Get a Halifax Clarity Credit Card for purchases.

If you’re rejected by Halifax, get a Creation Everyday Credit Card for purchases.

Post: #2

Time to close my Barclays account.

Post: #3

I'm lucky with Norwich & Peterborough, they used to have a branch open in Gibraltar and they offered a "Gold Current Account" which is basically a Classic account but without having to add in the £500 a month. Then they closed the branch over there and did away with the Gold Current Account but let anyone who already had one keep it.

So I basically have a Gold Classic Account but without the drawbacks

Post: #4

If you're in a location you can use credit cards instead of always withdrawing cash from an ATM, consider the Lloyds Avios Rewards account. You get two cards for the account: Mastercard & Amex. For the first year there's no fee and every year thereafter it's £24. However the big benefit is that there are no foreign transaction fees (there is still a charge for withdrawing cash on it from an ATM). On top of that you earn Avios points, double points for the first six months, and if you spend £7k in a calendar year you get a free upgrade voucher on flights (return trip or 2x single flights, but you have to book all parts of your journey at the same time) when you book a trip with your Avios points.

Post: #5

I'm not an UK citizen, but I'm curious - what are the exchange rate differences between Visa and MC?

Post: #6

Not to knock the OP's post, but I did a little searching into the Visa/MC exchange rate question. Apparently this isn't cut and dry. Here's a thread I found doing a quick google search on the subject:

http://www.flyertalk.com/forum/credit-ca...-visa.html

It seems that the card type doesn't really matter as FX rates change through out the day meaning what you perceive as a slightly better rate would be caused by the minute differences in fluctuating exchange rates each day.

Personally I have no card preference and tend to use Amex more.

Post: #7

I heard HSBC use to be good for this.

Post: #8

Thanks for the intel OP.

I opened an account with nationwide a few years back specifically because their card had no fees for withdrawing cash abroad but they soon got rid of that feature.

I think I will be opening an N&P account before my next big trip!

Post: #9

I have the halifax clarity card and use it for everything, considering I'm away from the UK 90% of the year I would say it's saved me a lot of money in fees.

I also have it set to automatically pay off in full each month from my bank account, so I'm not going to accumulate debt.

Post: #10

(02-18-2016 06:56 AM)CleanSlate Wrote:  I'm not an UK citizen, but I'm curious - what are the exchange rate differences between Visa and MC?

Visa vs. MasterCard Exchange Rates

I just looked up the yesterday's (26th Feb 2016) Visa and MasterCard exchange rates for the currencies of 10 of the most discussed countries on this forum's currencies and you'd be making anywhere between a 0.45% (Thai Baht) and 2.22% (Australian Dollar) saving by using MasterCard, so it is quite substantial.

Surprisingly, the exchange rates are closer for the more obscure currencies and the biggest savings come with some of the most popular/known currencies.

Below are the 10 currencies I looked up, what £1 would get you with Visa, what £1 would get you with MasterCard, and the percentage that you are saving by using MasterCard (all rounded down to 2 decimal places).

Post: #11

N&P is definitely recommended. I've used it all across Europe and Asia without problems or charges. Set up that monthly payment and all's good.