And breathe… it’s finally time for sun, sea and relaxation. But do you really need to take a huge wad of cash away with you on holiday or can you rely on your debit card for the trip?
If you’re worried about the disadvantages of using your card abroad, this guide breaks down the pros and cons, as well as how you can avoid any pesky fees.
Key takeaways
Potential additional fees: If using debit card abroad, potential fees can incur, including foreign transaction fees, overseas ATM fees and currency conversions fees.
Some debit cards don’t have additional fees: Some providers provide fee-free spending whilst abroad, such as Chase, Starling, first direct and Kroo.
Debit card provides more security than cash: Debit cards tend to provide more security than cash. Your money isn’t protected if your cash is lost or stolen and you should have the same level of protection from your card provider as you do at home
Debit card rewards: Possible to still get rewards abroad whilst paying with certain providers
Watch out for unwanted fees when using your debit card abroad
One of the main disadvantages of using your debit card abroad is any extra fees you could be charged by your bank. These include:
Foreign transaction fees. Some banks charge a foreign transaction fee of 2-3% if you use your card outside of the UK. You can avoid this by opting for a debit card with no fees.
Overseas ATM fees. If you use your debit card to take out cash, your card provider might hit you with an additional charge for withdrawals. Some private ATMs also charge a separate fee for use, so keep an eye out for this.
Currency conversion fees. You may be tempted to pay in pounds instead of the local currency, so you know exactly what you’re shelling out. However, if you do this, you’ll be subject to dynamic currency conversion – the exchange rate set by the retailer means you get an unfavourable exchange rate. It’s worth double-checking that your payments are in the local currency on your debit card.
Compare debit cards for fee-free spending abroad
While fees can make it off-putting to use your debit card abroad, many providers don’t charge foreign transaction fees. So, it’s worth considering one of these for your travels rather than avoiding using a debit card completely.
You can switch your current account to a bank that has no fees, or you can open a secondary account to use while abroad.
UK debit and prepaid cards from banks with no foreign transaction fees when abroad
Should you take cash or use your card when travelling abroad?
There’s no simple answer – whether you opt for cash or card depends on your personal preferences and how you like to travel.
Pros and cons of using cash
Cash can be a reassuring option. You can budget a fixed amount to take with you (although you do risk running out if you treat yourself a little too often). You’ll also have notes to hand for any places that don’t take card payments or prefer cash.
However, it’s not always the most secure option. You don’t have any protection if your cash is lost or stolen, and you could become a target if you carry a lot on your person.
Pros and cons of using a debit card
A debit card offers convenience and better security. Most shops and restaurants around the world will accept Mastercard or Visa debit cards so you can just tap and go. Plus, you can use your card to take out cash from an ATM if you do need it.
You can also freeze your card if it’s lost or stolen, and you should have the same level of protection from your bank as you do at home.
The main disadvantage of using your debit card abroad is that fees often apply – as we explain in more detail below. Plus, some vendors such as taxis or small local restaurants may prefer or only accept cash, so you could be stuck if you don’t have any.
If you’re still undecided, you might decide to opt for a mix of both – using your card for main spending, but a bit of cash as a backup.
Debit card vs credit card when spending abroad
You might also consider using a credit card rather than a debit card when travelling overseas. Some credit cards offer rewards or cashback on spending, which may be a nice boost to your planned holiday spending. It also lets you spread the cost of your travel over time.
However, credit cards also come with associated fees for spending abroad, and these could be higher than your debit card depending on the provider. Plus, some credit cards such as Amex are only accepted in certain locations.
Bottom line
The biggest disadvantage of using a debit card abroad is the extra fees you could end up paying. These can be easily avoided by opting for a debit card with no fees for withdrawals or transactions. If you’re still unsure whether to use cash or card, it can’t hurt to have a mix of options available to you.
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Sophie Barber is a content marketing manager for Finder in the UK after previously working as a content manager at a digital marketing agency. She has over 5 years experience in writing and publishing clear, concise and informative online articles for a variety of websites. See full bio
Sophie's expertise
Sophie has written 74 Finder guides across topics including:
Publishing original personal finance research
Creating data-led statistics pages to highlight industry trends
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