While some debit and credit cards let you spend abroad with no extra charges and near-perfect exchange rates, others can add hefty fees every time you buy a meal, pay for a hotel or withdraw cash.
Research shows the gap between the best and worst travel cards can amount to tens – or even hundreds – of pounds over the course of a typical two-week holiday.
Overseas spending fees
While many holidaymakers assume all bank cards work the same overseas, that’s far from the truth.
Most standard UK debit and credit cards add a non-sterling transaction fee of around 2.99% every time you spend abroad, meaning a €100 purchase will cost £102.99 once charges are added.
Some cards pile on even more costs, including flat fees for each transaction, charges for cash withdrawals and, in the case of credit cards, immediate interest on cash advances.
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By contrast, the best travel debit and credit cards waive these fees altogether, with conversions made using the Mastercard or Visa exchange rate.
Best debit cards: First Direct and Chase
For everyday holiday spending and cash withdrawals, look for a current account that comes with a debit card with no overseas fees.
Both First Direct and Chase allow customers to spend abroad without foreign transaction fees. They also both use Mastercard’s exchange rate, with no mark-up.
With First Direct’s 1st Account, there are no fees for withdrawing cash from a cash machine outside the UK, or when making a debit card payment in a foreign currency in the UK.
Chase allows fee-free cash withdrawals overseas, albeit up to set limits. You can withdraw up to £500 a day from cash machines (whether in the UK or abroad). But if you are travelling abroad, there is also a £1,500 limit on cash withdrawals in any calendar month.
If you’re not a big traveller, compare current accounts to find an account that meets your needs. Natwest/Royal Bank of Scotland was voted the best everyday current account, best student account and best reward account in the YourMoney Personal Finance Awards 2026.
Best credit card: Lloyds Ultra
For holidaymakers who prefer to use a credit card abroad, the Lloyds Ultra credit card stands out as one of the strongest options for summer 2026.
The card charges no foreign transaction fees on purchases overseas, allowing travellers to spend in local currency without paying the typical 2.99% non-sterling fee charged by many mainstream credit cards.
As with most credit cards, however, cash withdrawals should generally be avoided unless absolutely necessary, as interest is usually charged immediately.
Another perk of the Lloyds Ultra is that it pays 1% cashback on all card purchases for the first year, and 0.25% cashback after that.
Another credit card worth considering is Virgin Money’s travel credit card, which allows users to spend fee-free worldwide. Virgin Money was voted the best credit card provider in the YourMoney Personal Finance Awards 2026.
Watch out for foreign ATM fees
Whether you use a debit or credit card, your bank isn’t always the only one that might be charging you when you go abroad.
Many overseas ATMs apply their own operator fee for cash withdrawals, particularly in tourist hotspots. These charges are set by the local ATM provider rather than your card issuer and can sometimes amount to several pounds per withdrawal.
ATM withdrawal fees should be displayed on screen before you complete the transaction, giving you the option to cancel and find another machine if the charge seems excessive.
The cards to leave at home
Many of Britain’s biggest high street banks still charge customers for using their standard current accounts overseas.
Among the poorest performers is the TSB Spend & Save debit card. If you use your debit card in a currency other than Sterling, you’ll be charged a non-pounds transaction fee of 2.99% of the payment amount. Outside the European Economic Areas (EEA), you’ll also be charged an additional £1 purchase fee. This means spending the equivalent of £100 in US dollars will cost £103.99.
For cash withdrawals you’ll pay a non-pounds transaction fee of 2.99% wherever you go outside the UK, plus a non-pounds cash fee of 1.5% (minimum £2, maximum £4.50) if you’re outside the EEA. So, a £100 cash withdrawal in the UK will cost £104.99.
If you have a TSB account and don’t want to change banks, TSB’s Spend & Save Plus account costs £3 a month and doesn’t come with foreign usage fees.
Standard current accounts from Lloyds, Bank of Scotland and Halifax are also among the least competitive options for overseas spending. Their debit cards typically charge a non-sterling transaction fee on purchases, plus extra fees for both spending and ATM withdrawals outside the EEA.
What is dynamic currency conversion?
Holidaymakers using UK debit and credit cards abroad should be on high alert for dynamic currency conversion (DCC) – the seemingly “helpful” offer to pay in pounds instead of the local currency. It’s pitched as convenient, but it’s almost always a trap. Retailers, restaurants and ATMs can slap on eye‑watering mark‑ups of 5–12%, far higher than your bank’s standard foreign‑exchange rate.
The golden rule is simple: always choose to pay in the local currency. If a card machine flashes “GBP or EUR?”, pick EUR. If an ATM tries to steer you into a “guaranteed rate”, decline it. DCC lets the overseas merchant set the exchange rate, not your bank – and their rate is almost never in your favour.
Watch out for sneaky wording too. Some terminals phrase it as “Do you accept the conversion?” or “Without conversion”, hoping you’ll tap the wrong option. Take a second to read the screen and remember that paying in pounds abroad is almost always the most expensive choice.
