Spending money abroad can be tricky and it is good to research all of the available options before you decide which to do. Traveller’s cheques and cash used to be the norm, but these days many more places accept credit cards and it can be a convenient option. However there are some disadvantages to using a card abroad and there are people that avoid using them. It is important to understand some of the advantages and disadvantages to work out whether it is the right option for you.
Credit card companies different in their terms and conditions and so they charge differently. Some will charge a lot of money if you use them abroad, particularly if you draw out cash at an ATM and so it is worth finding out. You may be able to pay some money onto the card and use this to save money, but a prepaid card designed specifically for using abroad may be a better option if you want something that you can do this with.
It is worth finding out whether the shops in the area that you are staying will accept your credit card if you can. You may need a back up plan if they do not, perhaps taking some cash as well. It is usually wise to have cash to pay for taxis and things like this anyway.
Find out from your credit card company what fees they will charge and then compare it with other cards. You may find that there is a cheaper card that you could apply for that would be a lot better for you to use. Consider whether you are prepared to pay any of these fees or whether you would rather use an alternative. Also check whether the fees are the same for purchasing items as cash withdrawals. Cash withdrawals can often be a lot more expensive and it is worth knowing this. You may decide to take some cash with you, after exchanging it in the UK to save money.
It is also worth setting up a direct debit to pay off the full balance of your card before you go on holiday. If you are away when the bill comes and do not get a chance to pay it, you will be charged interest as well, on top of any charges you have had as a result of using your card abroad. Therefore make sure that you pay off the full balance so that you do not have to pay this. Obviously you will need to make sure that you have the means to pay this. It could make a really big difference though as it is easy for interest to quickly accumulate on a credit card with you just paying off the minimum. You could end up paying a lot more for the things that you have bought on the card this way.
A credit card has security advantages over cash too which make it good for spending abroad. If it is stolen then you can report it, get it frozen and you will not lose anything. However if cash is stolen it is almost impossible to trace and you will not get it back. You may also get some comeback if the goods that you buy with the card turn out to be problematic in some way, but this will depend on your credit card company. You may therefore feel more secure carrying a card rather than cash.
So whether you choose to use a card will depend on a few things. It can be costly but it is more secure than cash and so you may prefer it. A pre paid card is likely to be the cheapest option but you will need to be sure that it is accepted in the places that you will be shopping as you would with your credit card. It is really important though, if you are planning on using your credit card abroad, that you tell your card issuer. They track your payments and if they suddenly see payments form abroad when this is something you do not normally do they may suspend the card for security purposes as they suspect it has been stolen. Therefore let them know that you are going and do not forget to arrange that direct debit while you are doing it!