Most UK credit cards will quietly charge you around 3% every time you spend money abroad or buy something in a foreign currency online. On a two-week holiday where you spend £2,000, that’s £60 disappearing into bank fees for essentially no reason. The good news is you can avoid this entirely with the right card.
The Halifax Clarity card has been the gold standard for UK travellers for years now, and nothing has really dethroned it. It charges zero foreign transaction fees and gives you the standard Mastercard exchange rate without any markup. There’s no annual fee, so there’s essentially no downside to having one in your wallet just for trips abroad. The only catch is that if you withdraw cash from an ATM, interest starts accruing immediately rather than after the usual grace period. But if you’re using it primarily for purchases, which you should be, that’s not really an issue.
Barclaycard Rewards deserves a mention because it’s basically Clarity plus a small amount of cashback. You get the same zero foreign fees but also earn 0.25% back on everything you spend. It’s not much, but it’s better than nothing and still costs you zero in annual fees. For most people, this makes more sense than Clarity unless you really need that specific Mastercard network instead of Visa.
Here’s something that catches a lot of people out: when you’re paying for something abroad and the terminal asks whether you want to pay in pounds or the local currency, always choose the local currency. This is called dynamic currency conversion, and it’s basically a scam. The merchant or ATM sets their own terrible exchange rate, often 7% to 10% worse than what your card would give you. Even if you’re using a card with foreign fees, you’re still better off paying in the local currency and letting your bank do the conversion.
The other mistake people make is relying on just one card when travelling. What happens if that card gets declined, blocked for suspected fraud, or simply lost? You’re stuck. I always travel with at least two cards on different networks. Usually that’s Halifax Clarity as primary on Mastercard, Barclaycard Rewards as backup on Visa, and sometimes an Amex if I’m going somewhere with decent acceptance. That way you’re covered regardless of what happens.
For business owners with limited companies, Capital on Tap Business is worth considering. It offers the same zero foreign fees but adds 1% cashback on top, which is substantially better than the personal card options. The only requirement is you need an actual limited company, not just sole trader status.
One thing to watch with Halifax Clarity is ATM withdrawals. While there’s no fee for the withdrawal itself, you start paying interest immediately at the card’s standard APR. If you take out £200 and leave it unpaid for a week, you’re probably only paying a pound or two in interest, which is still better than the £5-10 flat fee most other cards charge. But ideally you’d pay off cash advances within a couple days of returning home to minimize the interest hit.
The maths on this is straightforward. If you travel twice a year and spend £1,000 each trip in foreign currency, using a standard card with 2.75% fees costs you £55 annually for absolutely no benefit. Halifax Clarity or Barclaycard Rewards cost you nothing and work exactly the same way. There’s genuinely no reason not to have one of these cards if you travel at all, even occasionally.
Just remember that these cards don’t typically include travel insurance or other perks. You’re purely getting the fee-free spending, which for most people is the most valuable benefit anyway. If you want travel insurance, rental car coverage, and airport lounge access, you’d need to look at premium cards like Amex Platinum, but then you’re paying £650 annually and dealing with limited acceptance abroad.