If you're splashing cash abroad, keep your credit card in your pocket

By Russell Cavanagh - 22/09/2008

I read your excellent article, "The hidden cost of using your card abroad" (14/07/08), with great interest.
 
Debt cards carry transaction fees on cash withdrawals and purchases made abroad. Consumers need to be aware of this, particularly if it means potentially going into overdraft on their current accounts and incurring further charges.
 
However, whilst initial transaction charges may be similar, withdrawals of hard cash using credit cards will almost always attract further interest (currently averaging well over 19%) that will certainly apply from date of transaction. Furthermore, any extra repayments made to a credit card will be apportioned to the cheapest outstanding debts on these cards - like 0% balance transfers or reward discounts - instead of actually reducing the amount of hard currency withdrawn from an ATM. Never withdraw cash on a credit card either at home or abroad unless it is an absolute emergency.
 
It makes sense to be very careful when using any cards abroad and it really pays, especially if using credit cards, to read the terms of use in the supporting documents beforehand.
 
However, on a more positive note, credit card purchases made abroad and at home offer good protection under the s75 of the Consumer Credit Act 1974. This specifically means that any defective goods or services valued between £100 and £30,000 should be refunded by the card issuer if a valid claim is made.
 

Russell Cavanagh