The best travel cards to use overseas: Credit card vs Debit card vs Prepaid vs Smart
TLDRIn this informative video, Andy Webb discusses strategies for managing money effectively while traveling abroad. He emphasizes the importance of using specialist cards that avoid foreign transaction fees, such as the Starling debit card and the Barclays card rewards for spending and backup protection, respectively. Webb also touches on the convenience of prepaid cards and digital wallets like Curve for additional security and budgeting purposes. His advice aims to help viewers maximize their purchasing power and avoid unnecessary fees during their international travels.
Takeaways
- 💡 Use specialist cards when traveling abroad to avoid fees on transactions and ATM withdrawals.
- 💳 Consider having a backup card for emergencies, such as in cases of theft or transaction issues.
- 🌐 Always pay in the local currency to avoid additional fees and unfavorable exchange rates.
- 🏦 Debit cards like Starling and Virgin Money offer zero charges on spending and ATM withdrawals, making them ideal for travel.
- 💳 Credit cards can provide extra protection like Section 75 for purchases over a certain amount, especially important for expensive transactions.
- 🛍️ Prepaid cards can be useful for budgeting purposes, but often come with high fees and are less common in use now.
- 🔄 Having a mix of Visa and MasterCard can be beneficial as acceptance may vary by location.
- 💡 For additional backup, consider a smart card like Curve which can be used with existing bank cards to make fee-free transactions.
- 💰 Be aware of the fees associated with different types of cards and always clear your credit card balance to avoid interest charges.
- 🔍 Do an eligibility check before applying for a new card to avoid affecting your credit score.
- 🎓 Regularly check for updated information on the best cards for spending overseas as offers and options may change.
Q & A
What is the main purpose of the video?
-The main purpose of the video is to provide advice on how to manage money effectively while traveling abroad, focusing on the use of various types of cards to avoid extra fees and manage expenses efficiently.
Why does the presenter recommend carrying a wallet with specific cards when traveling abroad?
-The presenter recommends carrying a wallet with specific cards to avoid being charged extra fees by normal debit or credit cards when spending overseas. These specialist cards do not charge fees for spending in various establishments or when withdrawing money from ATMs.
What are the advantages of using specialist cards for overseas spending?
-Specialist cards for overseas spending are advantageous because they do not charge extra fees for transactions in bars, cafes, shops, hotels, and taxis, nor for ATM withdrawals. This can help save money compared to using normal debit or credit cards, which often have additional fees and exchange rate markups.
What should one consider when choosing a card for overseas spending?
-When choosing a card for overseas spending, one should consider the absence of spending and ATM withdrawal fees, the availability of Section 75 protection for credit card purchases, the card's acceptance rate globally, and the option to pay in local currency without extra charges.
Why is it important to have more than one card when traveling abroad?
-Having more than one card is important for backup purposes. It can be useful in case one card gets pickpocketed, there are transaction issues, or a card provider experiences a service disruption. Having a backup card ensures financial access and security during travel.
What is the significance of paying in local currency when using a card abroad?
-Paying in local currency is significant because it avoids additional fees and exchange rates set by the local payment processor. Instead, it uses the free transaction rate offered by the specialist card, saving the user money.
What types of cards does the presenter suggest for optimal overseas spending?
-The presenter suggests debit cards, credit cards, and smart cards as optimal options for overseas spending. Debit cards like Starling and Virgin Money offer no charges on spending and ATM withdrawals. Credit cards provide Section 75 protection and are useful for pre-authorized payments. Smart cards like Curve offer a flexible third option for backup without additional fees on spending.
What are the benefits of using a prepaid card for travel?
-Prepaid cards can be beneficial for travel as they allow for budgeting by setting a limit on spending and can protect against overspending. They also offer some protection in case of loss or theft, as only the funds loaded onto the card are accessible.
What is the role of a smart card like Curve in the presenter's travel wallet?
-A smart card like Curve serves as a third backup option in the presenter's travel wallet. It can be used for spending abroad without incurring fees, and it can be kept as a secure backup in case the primary cards are lost or encounter issues.
What advice does the presenter give for managing credit card spending while abroad?
-The presenter advises that any money spent on a credit card should be cleared before the end of the month to avoid interest charges, which can negate any savings made from using a fee-free card. Additionally, they recommend performing an eligibility check before applying for a new card to prevent a negative impact on the credit score.
What are some alternative options to prepaid cards for managing money while traveling?
-Alternative options to prepaid cards include using debit cards like Starling and Monzo, which offer no fees for overseas spending, and digital banking services like TransferWise and Revolut, which allow users to hold multiple currencies and manage exchange rates effectively.
Outlines
💼 Introduction to Money Management and Travel Tips
The paragraph introduces Andy Webb, an award-winning money blogger, and his various platforms for financial advice. He emphasizes the importance of managing money effectively, whether it's saving, making, or just better managing it. Andy encourages viewers to subscribe and engage with his content for more financial tips. He then segues into discussing the contents of his travel wallet, highlighting the importance of having the right currency and cards when going abroad to avoid extra fees from normal debit or credit cards.
💳 Debit Cards for Overseas Spending
This paragraph discusses the advantages of using debit cards for overseas spending, focusing on the Starling and Monzo cards as popular options. These digital banks offer zero charges on spending and ATM withdrawals, making them ideal for international use. Andy also mentions Virgin Money as another good option due to its no-fee policy and interest on savings. He advises viewers to consider getting more than one card as a backup and to pay in local currency to avoid additional fees.
💳 Credit Cards and Their Benefits
The paragraph highlights the benefits of using credit cards for overseas spending, particularly Section 75 protection for purchases over £100 in the UK. This protection allows for claims against the credit card company if something goes wrong with the purchase. Credit cards are also useful for pre-authorized payments, such as renting a car or staying at hotels. Andy recommends the Halifax Clarity Credit Card and the Banking Card Rewards Account for their fee-free overseas spending and cashback offers. He also provides tips on avoiding interest charges on cash withdrawals.
📱 Smart Card Options and Prepaid Cards
In this paragraph, Andy introduces smart cards like Curve as a third backup option for overseas spending. Curve allows for fee-free spending by linking to existing bank accounts. He also briefly touches on prepaid cards, which can be useful for budgeting and locking in exchange rates, but notes that they have fallen out of favor due to high fees and the rise of more flexible debit card options. He mentions services like TransferWise and Revolut as alternatives for holding multiple currencies.
🎒 Final Recommendations and Conclusion
Andy concludes by recommending a debit card, such as Starling, as the primary card for overseas spending due to its ease of use and lack of fees. He suggests having a backup credit card, like the Barclays card, for larger purchases and extra protection. Lastly, he suggests having a third card, such as Curve, for additional flexibility and backup. He reminds viewers to subscribe to his channel for more money management tips and to engage with the content to help others find his advice useful.
Mindmap
Keywords
💡money management
💡travel wallet
💡foreign transaction fees
💡debit cards
💡credit cards
💡Section 75 protection
💡pre-authorization
💡smart cards
💡prepaid cards
💡exchange rates
💡multi-currency accounts
Highlights
Andy Webb is an award-winning money blogger and creator of the 'Be Clever With Your Cash' platform.
He also appears on Channel 5's 'Shop Smart Save Money' and hosts the 'Cash Chat' podcast.
The video discusses strategies for managing money effectively while traveling internationally.
Andy uses a specialized wallet for foreign travel, containing various currencies and essential cards.
He emphasizes the importance of using cards with no foreign transaction fees to avoid extra costs.
Normal debit or credit cards often have additional fees when used abroad, including load fees on top of exchange rates.
Andy suggests getting a specialist card for overseas spending to avoid these extra charges.
He advises having more than one card as a backup in case of loss or transaction issues.
It's important to pay in the local currency when abroad to avoid extra fees from currency conversion.
Debit cards are recommended as the primary option for spending overseas due to their fee-free nature.
Starling Bank and Virgin Money are highlighted as good options for fee-free debit cards.
Credit cards offer additional protections like Section 75 protection for purchases over £100 in the UK.
The Halifax Clarity Credit Card and Barclays Rewards Card are recommended as fee-free credit card options.
Prepaid cards are less popular now due to the rise of more flexible and cost-effective banking options.
Curve is introduced as a smart card that can be used as a third backup option for travel.
TransferWise and Revolut offer alternative banking solutions with multiple currency accounts.
In summary, a debit card should be the primary choice for spending abroad, with a credit card as backup and a third option like Curve for emergencies.