HSBC - Credit vs Debit card - Abroad

boohoo123

Hi,
I'm new here and I'd like to wish you all a happy new year!

Hope it's not already been discussed (if so i do apologize) cause I've tried to search the forum for it but didn't find exactly a clear answer for it.

I'm going on holiday to Italy next month and I was wondering if it's more convenient for me to use my HSBC Visa Debit Card or my HSBC MasterCard Credit Card for payments.

Will it make any difference in term of charges (I'll pay the cc bill in full anyway), or do you think it will be better to just withdraw euro with the debit card?

Thanks
Nick

firsttimestudent

Welcome!

Foreign transactions normally costs you in 2 different ways: firstly, the exchange rate loading fee; and secondly, an additional fee, could be cash withdrawal fee or point of sale (POS) fee.

For HSBC (may not apply to other banks), their debit card charges 2.75% exchange rate loading fee, and when withdrawing, they charge an additional 2%, with a minimum of £1.75. No POS fee.

For their credit cards, it's a 2.99% exchange rate loading fee and when withdrawing, a cash advance fee of 2.99% with a minimum of £3 + remember the interest gets charged from day 1 of the withdrawal. Again, no POS fee.

Based on the information, you are best to use your Debit Card for both purchases and cash withdrawals. In fact, to really save money:

1. Use the Debit Card directly for purchases (as opposed to withdraw cash then pay) as much as possible.
2. When withdrawing, withdraw at least £87.50 sterling equivalent in one go (obviously balancing the risk of theft etc.).

Considering all the fees involved in using your HSBC card, you may be able to find some high street/online retailers with better rates, i.e. change the money before you go.

If you still have time, considering applying for Nationwide's Flexaccount/Credit Card, Post Office's Mastercard and Santander Zero - especially if you do foreign travel quite frequently.

boohoo123

Hi,
first of all thank you very much for your explanation, I really appreciate.

I had a look at the Sandanter Zero and looks really good, to be honest I was planning to apply for a card (that was the hsbc) on monday and I will probably end up with the santander one considering that looks similar to the hsbc but has zero abroad...

Please correct me if I am wrong, if I get the santander I would not pay the 2.99% and will only pay the pos charges, so in that case I would be better paying everything with the credit card and withdraw with the debit (if needed) right?

Thanks again
Nick

firsttimestudent

Hi Nick, glad to be of help.

The Santander Zero card does not have POS charges - so it is really free. No exchange rate loading, no additional charges either.

Yes, based on your reasoning, the Santander card will be cheaper for paying for purchases. In fact, some in this forum may even suggest withdrawing with the Santander card - but I tend to dislike this idea as interest starts from day 1, and you have to completely pay off the card once you withdraw cash as cash advances are always the last to be paid off.

If you do go for the Santander card, do go to the branches to apply as opposed to online, due to feedback from people in the forum here that online applications often get loss/delayed significantly. Also I heard it is not very easy a credit card to get, but if you do I think it'll be helpful for any future foreign travels!

boohoo123

Great! I'll definitely try to get one of those then and use the debit card for cash withdraw...

You've been the best! Thanks again for being so helpful!

Nick

ManAtHome

I have Nationwide debit and credit cards for overseas use (HSBC is my main current account). For Europe, I've found taking pound notes and changing locally is around halfway between the NW (cheap) and HSBC (expensive).

I use the NW debit card for ATMs and the CC for buying stuff in shops/airports etc,

gt94sss2

boohoo123 wrote: »

I had a look at the Sandanter Zero and looks really good, to be honest I was planning to apply for a card (that was the hsbc) on monday and I will probably end up with the santander one considering that looks similar to the hsbc but has zero abroad...

If you are going to apply for a credit card for use abroad, I would suggest applying for the Post Office Mastercard in preference to the Santander Zero - especially, if you are going to be using a debit card for withdrawing cash.

This is because (as already mentioned), Santander take a very long time to process applications, their customer service isn't that great and they charge you a £10/fee dormancy fee every 6 months if you don't use your card - which is a pain if you are not a frequent user or only have the card for overseas use/don't travel overseas frequently.

In addition, the Post Office paper credit card statements are much easier to understand, even if their website is useless.

Having said all the above, if this is going to be your first credit card, you may find HSBC's easier to actually get..

Regards
Sunil

boohoo123

Thanks for the answers guys...

I have to admit that now I'm a little bit more confused.

Maybe as you said I'll be better sticking with the hsbc one (that should be easier to get) and think about something else later on.

At the end of the day if I just use it in the UK and repay it in full every time is exactly the same as everything else.

Any experience guys with the Egg card... I've read on this site that is a good deal for the cash back, but i've also read some very negative reviews in terms of customer service (maybe cs is bad everywhere?)...

Thanks again

Ps. How long does it usually take to get the card from the day you apply?

chattychappy

I have both Post Office and Abbey/Santander Zero.

I know people have had problems getting Zero, but I got mine in a couple of weeks without a hitch. In fact I think all the cards I have ever applied for have been sorted within a couple of weeks. Can take a bit longer to get the online thing running if they have to send something further through the post as Zero did. Comparing Zero with PO, the Zero online system is miles better than the Post Office system which I curse every time I use it. It's cheaper for ATM withdrawals too. Neither charge a forex charge (typically 2.75% with other cards). Post Office charge a cash advance fee as most providers do. Santander does not. I think both charge interest from the date of the withdrawal (Zero certainly does.)

So for non-EU I would use the Santander card for ATM withdrawals, paying off asap afterwards (ie dont wait for a statement) and PO Office for purchases. If that's too much hassle, then just use Santander, but still pay off promptly.

Using something like HSBC in an ATM overseas can work out really expensive - they take such a massive cut of your spending.

Remember also that some cash machines (just like ones in the UK) can apply their own fee too - regardless of the deal you have here. It should be clear at the time of the transaction though.

I travel alot in Asia. Almost nowhere have I found taking GBP cash and changing on arrival as cost-effective as using Zero (and previously Nationwide Debit) in a cash machine.

OH and one more thing. When making purchases, make sure you are charged in the local currency. Some shops will offer (or practically force you) to do the transaction in GBP. The shops exchange rate will mean that you are probably worse off that way, especially if you are using PO/Zero.