If you're heading to the "Island of Love" to enjoy year-round sun, pristine beaches or ancient ruins, here's how to avoid fees when you use a credit card.
Cyprus became part of the eurozone in 2008, but while the southern part of the island trades in euros, Northern Cyprus uses Turkish lira. Visa and Mastercard are widely accepted in Nicosia and other towns on the island (both south and north), and it’s rare that there’s a minimum purchase amount – so you can happily buy your souvlakia and halloumi using plastic!
The country is still trying to shake its reputation for financial instability, but its banking system is one of the most developed in Europe for tourists. ATMs are easy to find throughout the country, and you won’t have to look far to find one that doesn’t charge a fee.
What about fees?
As you’d expect, there are a few potential fees to watch out for when you’re paying with plastic in Cyprus:
Foreign transaction fees. A non-sterling fee of around 3% per transaction can apply, depending on your credit card. That’s £15 in fees for every £500 spent with your card.
Merchant currency conversion fees. Sometimes, a local merchant will offer to take payment in pounds. This is known as a dynamic currency conversion (DCC), and it can mean higher fees than if you simply paid in the local currency.
Card payment surcharges (charged by the merchant). If you’re using a Visa or Mastercard from an EU bank, you won’t need to worry about card payment surcharges.
Cash advance fees. Your card issuer may charge a fee for cash advances (withdrawing cash using your card).
Cash machine fees. The provider of a cash machine may charge a fee if you withdraw cash using your card, although this is thankfully becoming rarer.
It’s also worth noting that when it comes to cash advances and non-sterling transactions, many card issuers will start charging interest on the day your account is debited, rather than the customary “up to 55 days interest-free” that usually applies provided you clear your balance in full each month.
EU ban on credit card surcharges
In January 2018, the EU required member states to adopt the Payment Service Directive 2. The PSD2 is a ban on card payment surcharges – when a retailer adds a fee because you’re paying using a credit card. However, it’s important to note that there are limitations and exceptions to this directive and there are other fees that may apply when you pay by credit card. If your card is from a non-EU bank, uses a network other than Visa or Mastercard or is a business/corporate card, then the merchant may still levy a surcharge.
So how can I avoid the fees?
Consider taking out a credit card offering commission-free currency conversion (see table below), even if you only use it when you’re out of the country. Once you have one of these cards, if a merchant offers to take payment in pounds, say you’re happy to pay in the local currency, since you know that your own bank won’t add a margin.
Generally speaking, it’s not a great idea to use credit cards to withdraw cash, but some travel credit cards won’t penalise you for this either. Finally, make sure to check whether any ATM you use is going to charge a fee. High street bank ATMs are generally a safer bet than those in convenience stores or bars.
During the Cypriot banking crisis, the ATMs had smaller withdrawal limits – often around 100 euros. These limits have now been lifted, but different machines will have different withdrawal limits.
Compare cards with fee-free currency conversion in Cyprus
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American Express is accepted by some retailers, although it’s not as common as Mastercard and Visa. Additionally, merchants may levy a surcharge for Amex payments.
Contactless and chip-and-PIN payments
Contactless payments are available for payments under 20 euros.
You can make chip-and-PIN payments throughout the country, provided you have a four-digit PIN.
Is it safe to use my credit card in Cyprus?
Card scams – and crime in general – are relatively rare in Cyprus. As far as safety goes, you can freely use your card. However, there are some precautions you can take for increased security:
Use an ATM within a bank. If for some reason the ATM eats your card, you’ll be able to quickly retrieve it. Also, ATMs within banks are less likely to be tampered with. Should you use one outside a bank, check for devices attached to the reader and cash return slot.
Consider taking an additional credit card. You can use your primary card for payments and keep your back-up card in your hotel room safety deposit box. That way, you’ll never be left without money.
Keep your card in sight. Card cloning is rare in Cyprus, but just in case, don’t let your card out of your sight.
How to prepare before traveling to Cyprus
Get a credit card without foreign transaction fees. If you travel often, avoiding the 3% foreign transaction fee can save you a lot of money. Consider getting a travel credit card to avoid the foreign transaction fees.
Opt for a Mastercard or Visa. They’re the most-widely accepted cards and Cyprus is no exception, though you can still use your American Express cards in some locations. There are also enough ATMs around if you want to withdraw cash with these cards as well.
Carry a back-up card. Try to always carry a second card when traveling abroad, given you don’t know what could happen to your primary card.
Get some cash. In general, you can pay with plastic almost anywhere in Cyprus. But if you want to make a cash withdrawal, keep in mind that credit cards have additional fees while most debit cards don’t.
Inform your bank you’re traveling to Cyprus. If you don’t let your bank know ahead of time the dates you’ll be away and where you’ll be, it may block your card if it suspects the charges are fraudulent.
Make a note of your bank’s phone number. If you lose your card or have payment issues, you’ll be able to call the bank to resolve it.
Do taxis in Cyprus accept credit cards?
You’ll need to pay cash when using a taxi in Cyprus, so make sure you have the cash before you get in.
Bottom line
If you travel to Cyprus, you can safely use your credit card to make payments and withdraw cash. You’ll just have to be careful to not incur fees you can otherwise avoid. With a decent travel credit card, you’ll avoid paying foreign transaction fees. By simply declining the DCC when offered, you’ll also avoid a poor exchange rate or commission.
Frequently asked questions
Cyprus has been using the euro since 1 January 2008. Euro notes come in denominations of 5, 10, 20, 50, 100, 200 and 500 euros. You can get 1 and 2 euros coins as well as 1, 2, 5, 10, 20 and 50 cent coins.
However, in Northern Cyprus, they use the Turkish lira. It comes in denominations of 5, 10, 20, 50, 100 and 200 liras. The lira is divided into 100 kurus. Its coins come in denominations of 1, 5, 10, 25 and 50 kurus.
The largest banks operating in Cyprus are Ancoria Bank, Bank of Cyprus, Cooperative Central Bank and RCB Bank.
You may wish to check with your bank to see if it has an active partnership with any of the local Polish banks. If it does, you could save on fees for ATM withdrawals.
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Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio
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