If you go on holiday and spend £1000 on your credit card any idea how much you pay in fees? I hadn’t a clue, hardly top of my list of priorities if you are going away for a few days. So off to Google and Martin Lewis’ Money Saving Expert who do a nice comparison. Ouch…
- Holiday spend of £1,000 = £30 load (doublespeak for fees) for most credit cards
- Family Gap Year spend of £15,000 = £450 load?!!?
Call me Scrooge but even if my bank has just made another few billion in losses I am not keen to support them by paying fees when I don’t need to.
Which type of credit card to take was an easy decision. You need all of them, Visa, MasterCard and American Express if your credit history will stand it. Many far-flung places only take one type of card, their machine is having a bad day with Visa or your bank declines you as it thinks the card should only be used to buy groceries on Saturdays in your local Tesco and not in Mongolia.
Here are my selections:
Post Office MasterCard – 0% fee on overseas purchases and foreign exchange before you go. APR 16.9% which is pretty high so I’ll be paying it off every month in full. I applied on the Sunday and had the card on the Tuesday, with a reasonable credit limit, impressed!
Halifax Clarity MasterCard – 0% fee on overseas purchases. APR from 12.9%. My recommendation for Mo so we have different cards.
If you are over 50 the Saga card also has 0% fees or you could get a Sainsburies Gold card but that has a £5/monthly fee.
Nationwide Building Society Select Visa Credit Card – 0% fee on overseas purchases, perfect. The catch is you need to have a bank account with them, pay in £750/month and transfer in direct debits from another account.
The only other Visa card that has 0% fees on overseas purchases is the Nationwide Credit Card but this is only for 6 months, no good for us but might be if you are doing some pricey or extended holidays.
2.99% fees to be the norm across the board on all cards so it won’t be getting a lot of use apart from some places that only take Amex (some do exist!). What is good is their replacement card service. If there is an Amex office near you you can go in in the morning and get a replacement that afternoon, if not you should get one couriered to you within 24-48 hours. We have used Amex emergency assistance in the past and it has been brilliant, I am not sure I am going to get a replacement Post Office card quite so quickly!
What about Debit Cards for purchasing?
No, no, no. For goods and services over £100 (Sterling equivalent) you can get your money back from the credit card company if you don’t get the agreed service or goods. It is called Section 75 of the Consumer Credit Act 1974 and I have made a few claims over the years.
The credit card companies try to fob you off with time limits, forms and proof (useful to keep receipts here) but I have persevered and always got my money back.
Top Tip – A lot of companies on your travels don’t like taking credit cards as they get charged hefty fees and make you pay in cash. Insist on paying part of the bill by credit card i.e. a deposit of $25 on a $500 excursion. If it all goes wrong you can claim the full $500 back from your credit card company! A lot easier than trying to get your money back locally and much safer.
Here is the OFT article if you want to find out more.
All credit cards charge a fee, normally with a minimum, add their ‘load’ for currency conversion and then they charge you interest from Day 1 as it is a cash withdrawal, all seriously bad news (about £5/£100! plus typically £1.50/month interest). What we want is a Debit Card with no fees but for this we need yet another new bank account, I’ll let you know how we get on…