The Halifax Clarity credit card is a top travel credit card that has no fees on overseas spending, so it's a good an option if you're looking for a cheap way to spend abroad.
Here, Which? explains what you need to know about the offer, how the card compares, plus how else you can save on holiday money if you're not keen on taking out a travel credit card.
What does the Halifax Clarity credit card offer?
You won’t be charged interest on your spending abroad, provided that you pay off your card in full each month. However, you’ll be charged interest on cash withdrawals from the moment you make them. This means you’ll still pay some interest even if you pay off your card in full.
Halifax is offering a limited time cashback promotion allowing new customers to get £20 cashback with any purchase (of any amount) made in the first 90 days of owning the card. The cashback will be credited to your account within 180 days.
Find out more:How does it compare?
The Barclaycard Rewards Visa is another competitive travel credit card.
It also has no foreign transaction or cash withdrawal fees, and you get Visa's exchange rate. Unlike the Clarity card, it charges no interest on cash withdrawals, as long as your card is paid off in full each month.
The card also pays 0.25% cashback on your everyday spending (credited annually or on your request), and has a representative APR of 25.9% (variable).
Another perk of the card is that you can get up to five months of Apple Music, Apple TV+, Apple News+ and Apple Arcade for free.
Find out more:How else can you pay abroad?
We've rounded up other ways you can pay abroad if you don't fancy taking out a travel credit card.
Use a fee-free debit card
A fee-free debit card is the cheapest way to spend while you’re abroad - you even get a near-perfect exchange rate through the Mastercard or Visa networks.
The leading banks are Chase Bank and Starling, where both spending and cash withdrawals abroad are fee-free, with no limits. Chase also offers 1% cashback on purchases for a year.
All of these accounts take minutes to open, and while your physical card will take a few days to arrive, you can add a virtual card to Apple Pay and Google Wallet immediately.
Find out morePrepaid cards
While predicting exchange rates is extremely difficult, you could opt to change half your holiday money into foreign currency in advance, if it makes you feel more comfortable.
You’ll pay no fees to exchange with Revolut on weekdays, or 1% on weekends, although on the basic free plan you can only exchange £1,000 a month.
Wise charges between 0.41% for pound-to-euro conversion, or up to 0.86% for other currencies.
Note that you won’t earn interest on your balance, and if you convert unused currency back, you’ll have to pay the fee again.
Your money isn’t covered by the Financial Services Compensation Scheme (FSCS), but under e-money regulations it's ringfenced from creditors should the provider go bust.
Find out moreForeign cash
The cheapest way to get foreign cash is to withdraw it at your destination, using one of the above-mentioned debit cards. But in many instances you’ll need some cash to hand when you arrive, such as to pay for a taxi.
Compare bureau de changes online: moneysupermarket.co.uk is one of the larger comparison sites. Thomas Exchange is one of the more established providers, although you’ll see supermarkets including Asda, M&S, Sainsbury’s Bank and Tesco crop up with good rates occasionally.
You’re usually best off ordering online - the larger sum the better - than collecting in-store, to access better rates while avoiding delivery costs.
Find out more5 things to consider with holiday money
When picking the best way to pay on your next holiday, make sure you consider these issues.
Cards for car hire
Many car hire companies won’t accept debit cards or prepaid cards for holding funds until you return the vehicle.
While you could use a regular credit card for pre-authorisation - which shouldn’t by itself trigger a fee - using a travel credit card means that, should anything go wrong, you won’t have card charges adding insult to injury.
Smartphone reliance
What all the fee-free debit card providers have in common, along with the prepaid cards, is a reliance on smartphones.
If you don’t have one, consider Metro Bank, which offers a credit card with free spending and cash withdrawals in most of Europe, and you can apply and get the card printed in a branch.
Double conversions
When paying by card, always opt to pay in the local currency, and if you’ve not been given the choice, ask the retailer why not.
Paying in pounds will mean a local bank does the conversion - not necessarily at the best rate - and often adds a fee.
Local cash machine charges
Don’t expect to find free cash machines abroad, but avoid high-cost ones, such as at airports, and instead use cashpoints at local bank branches.
As fees are often a flat figure, it makes sense to withdraw all the holiday cash you think you’ll need at once.
Inactivity fees
The prepaid card providers we mention don’t charge inactivity fees, but many other providers do if you don’t use your card for several months.
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