Credit card the best way to spend abroad?

gettingthehangofthis

Hello MSE,

I'm looking for the best way to store and access my money whilst travelling abroad (SE Asia) at the end of the year.

My spending budget for the whole 6 week trip (excluding injections and flights etc) is £1800, so £300 per week.

I've just been approved for a Halifax Clarity credit card as recommended here moneysavingexpert.com/travel/cheap-travel-money I was planning to use this only for emergency money (up to £800 - APR 21.95%). I've set up direct debits to pay back the full amount owed each month.

I will also have £700 extra in cash saved up in case of any extras.

Does anyone have any advice for the best way to store my budget of £1800? Should I use a standard debit card? Or withdraw my budget of £300 in cash each week? Maybe I should just use the credit card to withdraw cash and for purchases and pay back the money owed from my pot of £1800 with the previously metioned automatic direct debits?

The existing debit cards I have are Lloyds Classic, Nationwide Flex Account and Nationwide FlexDirect & their rates are:

Lloyds Classic Account
Cash withdrawal - 1.5% of value of withdrawal (min £2.00, max £4.50) + a non-sterling transaction fee of 2.99%.
Purchases - £1 non-sterling purchase fee + a non-sterling transaction fee of 2.99%. :eek:

Nationwide Flex Direct & Nationwide Flex Account
Cash withdrawal - 2% non-sterling transaction fee + £1 non-sterling cash fee.
Purchases - 2% non-sterling transaction fee.

If I sound confused, it's because I am! Any help very much appreciated, thank you.

Herbalus

If the Clarity is the best card (which it is), why would you use it as a back-up card and consider a normal, more expensive card as your first choice?

gettingthehangofthis

Because I don't really understand credit cards, you can't load it up with a balance can you? If it is linked to my bank account will the funds be deducted from there at the end of each month?

gettingthehangofthis

Sorry if I'm sounding a bit thick but I don't really understand them and wondered if anyone could help me see it from their point of view

reclusive46

The Clarity is by far best. If you pay a credit card off in full each month you don't pay interest. Just setup a direct debit to pay the card off in full and it will come out of your bank each month. You will pay interest on cash withdrawals still but it is a very small amount and much cheaper than using any of those other cards.

gettingthehangofthis

Thank you reclusive46. Just getting my head around this, as I've never had a credit card before! lol. So as long as my £1800 (+ spare £700) is in the account that the direct debit (to my credit card) comes out of, I will be effectively paying from that pot of money?

Still reading up on things and some suggest that I have more than one card in case it gets swallowed/stolen etc.

gettingthehangofthis

Oh hang on, I've only got an £800 limit! Does this mean £800 per month, or at any one time? If I pay any spending off immediately (by transferring money online) does that mean I get my £800 limit back? So confused.

reclusive46

gettingthehangofthis wrote: »

Thank you reclusive46. Just getting my head around this, as I've never had a credit card before! lol. So as long as my £1800 (+ spare £700) is in the account that the direct debit (to my credit card) comes out of, I will be effectively paying from that pot of money?

Still reading up on things and some suggest that I have more than one card in case it gets swallowed/stolen etc.

That is correct, as long as the money is in the account and you've setup the direct debit to pay in full.

Definitely have a back up card but one of your debit cards will probably be ok in case of an emergency, in several years I've never had an ATM swallow my card (MasterCard actually changed the rules so ATMs should only retain (Swallow) a card if its been reported stolen, but some ATM providers may not have updated the software).

It depends really. I don't know if Halifax offer an emergency replacement service like American Express. American Express can get you a new card overnight or you can get an instant replacement at a travel office. I know a couple of other issuers offer this(BarclayCard).

The Kalixa card may not be a bad backup, its a prepaid card and is free to use abroad (Although it does cost to withdraw from an ATM - Flat £2 fee I think). You can get one for free through Quidco cashback usually.

What countries are you going to?

If your going to the USA (Mainly in New York, Boston and LA), remember to have cash on you as some restaurants will only take American Express (They will normally have a sign informing you of this though).

gettingthehangofthis

Yep it's set to pay back in full.

I'm thinking about a having either a Metro Bank card or a Capital One Aspire World to use as a back up. I don't like the sound of a pre-loaded cash card as you pay each time you withdraw cash so it encourages you to get out more cash at a time which is obviously riskier.

Is the £800 limit an issue if I am going to spend £1800 over six weeks? (This is why I prefer debit cards, it's easier to see how much is left!)

I'm going to Vietnam, Cambodia and Thailand in December.

Herbalus

gettingthehangofthis wrote: »

Is the £800 limit an issue if I am going to spend £1800 over six weeks? (This is why I prefer debit cards, it's easier to see how much is left!)

It could be an issue. You can check online how much you've spent on the Clarity, and it should tell you an 'available balance'. This is the money that you can spend. Be careful not to exceed the £800 limit or you'll be charged £12.

If you approach your £800 limit too soon, after week 3 for example, you can send a faster payment from your bank to the Clarity card, assuming you have online banking, and this will free up available space on the Clarity. You can find the account number and sort code to do this online, and remember to include your card number in the reference field.

gettingthehangofthis

Ah I see, thanks for that. I thought that the Halifax cc didn't allow cash transfers in other than to cover the amount owed though?