Best travel credit cards 2022: Near-perfect exchange rates for overseas shopping

Ruth Emery
11 May 2022

Going on holiday? Then avoid costly fees when you spend abroad with our pick of the best travel credit cards

If you’re planning an overseas holiday, then make sure you pack the right credit card – or you could be hit with high fees and an unfavourable exchange rate.

The majority of credit cards charge fees when you use them abroad. However, there are a few exceptions. Travel credit cards charge low fees or no fees at all when spending money abroad, or for withdrawing cash at overseas ATMs. They also offer competitive exchange rates, which can give the value of your holiday money a big boost.

Whether it’s a long-awaited long-haul holiday, a weekend away in Europe or an overseas business trip, we’ve researched the credit card market to help you find the best travel credit cards to use in 2022. We’ve also referred to our inaugural Money Awards to see how the providers are rated for customer service.

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How to choose the best travel credit cards for you

How do travel credit cards work?

Most credit cards can be used abroad, but customers are normally charged a fee by the card provider for each transaction they make – for example, every time they withdraw cash from an ATM, pay a restaurant bill or buy a souvenir in a shop. The fee can be about 3%, which means £100 of foreign currency will actually cost £103.

However, there are a handful of specialist travel credit cards that waive these fees, while the customer also benefits from the excellent exchange rate the bank uses to process the transaction.

Over a two-week holiday, these cards could save you more than £50 in fees, leaving you with more money in your pocket for cocktails and ice-creams.

A credit card will also protect your purchases under Section 75 of the Consumer Credit Act. Pay for something on a credit card between £100 and £30,000, and the card provider is equally liable with the seller if something goes wrong – for example, if your hotel booking is cancelled or a souvenir you buy is damaged.

As well as travel credit cards, you can also get your hands on travel debit cards, which could be a smart choice for overseas spending. If your current account has a fee-free debit card, consider using this on your next trip. However, if you prefer to use a credit card – and you don’t want to open a new current account to get a travel debit card – then read on to discover the best deals on the market.

Travel credit card golden rules

Check your existing credit card: Don’t be tempted to slip your normal credit card into your hand luggage. First, check the fees it levies on overseas spending and cash withdrawals. If you can’t find the information online, give the provider a ring.

If your card provider offers a competitive deal, then pack it. If not (which is likely to be the case), consider applying for a specialist travel credit card, which could save you a small fortune in fees on your overseas trip.

Pay off the credit card in full: Make sure you pay off your holiday spending in full every month, or you could see the savings you’ve made disappear in the form of interest payments.

You can set up a direct debit to pay off the balance each month, or you could pay it off via your online account or by calling the provider when you return from your trip.

Spending on your card is cheaper than ATM withdrawals: Spending money on your travel credit card is usually cheaper than withdrawing cash. So, where possible, use your card to make payments, and keep the amount of holiday cash in your wallet to a minimum.

Interest is usually levied on any cash withdrawals until you pay off the credit card bill. If you're organised and pay it off quickly, you can prevent any interest payments from racking up.

Always choose the local currency: Many overseas hotels, shops and ATMs ask if you’d like to pay in pounds or the local currency when you use a card. Always choose the local currency, as your travel credit card will do the exchange at the best rate.

Disclaimer: A product or firm being well placed in this article based on past performance is no guide to their likely future performance. Our ranking does not amount to a recommendation.

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The best travel credit cards in 2022

1. Barclaycard Rewards: The best travel credit card for withdrawing money at ATMs

This is the best all-round travel credit card. There are no fees for using the card abroad – plus, unlike its competitors, there’s no interest levied on ATM withdrawals as long as you repay the balance each month.

In addition, customers receive 0.25% cashback on almost all spending, and up to 15% cashback if buying from a range of retailers through the Barclaycard Cashback Rewards scheme. Currently, card-holders also receive free subscriptions to Apple Music, Apple TV+, Apple News+ and Apple Arcade for up to five months.

The APR is 22.9%. You must be aged 21 or over and have an annual income of more than £20,000 to apply for this Barclaycard.

Apply now

2. Halifax Clarity: The best travel credit card for customer service

This card is a top pick: there are no fees on overseas spending or on ATM withdrawals. You won’t get charged interest on spending abroad if you pay off the balance, but you will for making cash withdrawals – so try to minimise these and/or make regular payments throughout the month to clear the balance.

Launched in 2010, the Halifax Clarity credit card was the first such card in the industry to not charge foreign exchange fees. More than three-quarters (77%) of customers who bank with Halifax rate the customer service as “quite good” or “very good”, according to Expert Reviews’ Money Awards 2022. Its online banking is also highly regarded, with 88% of customers saying it’s “quite good” or “very good”.

The APR is 19.9%. The eligibility criteria isn’t as strict as the Barclaycard Rewards card; applicants must be 18 or over and have a “regular annual income”.

Apply now

3. NatWest: The best travel credit card for low APR

The NatWest card charges zero fees for spending money abroad, making it a handy companion for overseas trips. However, beware of the cash machine charges: there’s a 3% fee (minimum £3) on ATM withdrawals. Note, too, that the card is also only available to existing NatWest customers.

If you use this card abroad, try to limit cash withdrawals, and as with all credit cards, aim to clear the balance in full each month. However, if you forget to make a payment or aren’t able to do so, then the good news is that the interest rate is low, with an APR of just 12.9%. This is less than half the interest rate charged on a typical credit card.

NatWest scores well for customer service in Expert Reviews’ Money Awards 2022, and customers are also happy with the online banking functionality (86% said it was “quite good” or “very good”) and the app (79% said it was “quite good” or “very good”).

Apply now

4. 118 118 Money: The best travel credit card for those with a low credit score

You won’t be charged any fees for using 118 118 Money’s credit card abroad to spend or withdraw cash. It’s an excellent choice for holidays, especially if you have a low credit score. According to 118 118 Money, the card is “perfect for credit building” and comes with a “guaranteed credit limit” of £1,200. As well as being fee-free for foreign transactions, there are also no charges for balance transfers or late repayments.

However, make sure you pay off the card in full each month, since the APR interest rate is high at 34.0%. Otherwise, you could see the benefits of zero-fees overseas wiped out by the interest.

To apply, you need to be at least 18 and earn more than £8,400 a year.

Apply now

5. Virgin Money Travel: The best travel credit card for interest-free purchases

Virgin Money’s Travel credit card is great for those looking to spend money in the UK and abroad, but it isn’t so good for withdrawing cash at overseas ATMs.

While Virgin Money’s credit cards all offer fee-free spending in the EU, its Travel credit card goes a step further, with fee-free spending worldwide. The Virgin Money Travel card also pays cashback when customers sign up to the facility via the app. Shoppers can currently enjoy 10% cashback with Morrisons, Costa Coffee and Virgin Voyages, and 12% with Sweaty Betty. In addition, there’s 0% interest on purchases and balance transfers for the first nine months.

However, travellers need to watch out for the 3% fee when using an overseas ATM. The APR is 21.9%, but the interest rate for cash withdrawals is 27.9%, which is charged daily until the balance is paid off.

Apply now

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