SPENDING POWER

You put plenty of thought into what to pack in your suitcase, but what about what you carry in your wallet? Here’s our guide to the best credit and debit cards to use when travelling

- RUTH JACKSON-KIRBY

There are a number of charges you can face when paying with plastic abroad. Pick the right card and you can eradicate most of these, making foreign transactions much cheaper. First, consider the cost of converting your money into the local currency. Just like when you buy currency at a foreign exchange, the rate can vary between different card providers. Your provider will use an exchange rate set by Mastercard, Visa or American Express – these are all very close to the “spot” price so offer a better rate than you would get at a foreign exchange.

Of the three, Mastercard tends to offer a slightly better exchange rate than Visa or American Express but it is a small difference. For example, at the time of writing Mastercard was offering €1,157 for £1,000, compared with €1,150 from Visa.

On top of the exchange rate, many card providers – both debit and credit – charge a non-sterling transaction fee. You will pay this every time you use it, and it is typically up to 2.99 per cent of the transaction.

Then there is the non-sterling cash fee. This is a charge of about 3 per cent whenever you withdraw cash from an ATM. Also, if you take out money using a credit card you may be charged interest from the moment the notes are in your hands.