About to head on holiday and want more to spend? Pick up one of the best debit and credit cards to help you avoid overseas fees

A holiday is costly enough without the added horror of returning home to find your bank statement littered with extra fees and charges after using your card overseas.  

But there are ways to avoid extra costs when withdrawing money or using your credit or debit card on holiday. Here we pick the best accounts which offer small or, even better, no fees - a worthwhile money-saver, particularly if you are a frequent-flyer. 

Just make sure that you leave yourself time to apply before going away...

On holiday? Make sure you're not spending too much on fees

Current accounts

They may be free to use at home, but debit cards can be serious offenders when it comes to extra holiday costs.

Charges can quickly add up, with some providers charging £1.50 every time you use your card, loading exchange rates and adding extra fees for taking out cash.

HSBC, for example charges 2.75 per cent per purchase. Each time you take money out of an ATM you will be charged 2.75 per cent for the transaction plus an extra 2 per cent ATM withdrawal fee, with a minimum of £1.75 and a maximum of £5. 

Barclays will charge you a 2.99 per cent non-sterling transaction fee for getting out cash and making purchases and adds another £1.50 charge for cash withdrawals unless the ATM is owned by Barclays, or one of the limited numbers of its partners in the Global Alliance.

Big charges mean that you should avoid taking out small amounts of cash often and try to take out larger amounts less regularly, although this brings its own risks in terms of theft.

Luckily, if you don't want to pay out to spend, there are a few options out there that can help you to avoid extra costs. We round-up the best bank accounts and credit cards below.

Norwich and Peterborough Building Society - best for spending

N&P's Gold Classic account offers a number of free services, helping you to save money when managing your finances.

Stress free: Pick the right card and you can avoid spending extra on holiday

No overseas charges

First and foremost, this account ticks all the boxes when it comes to fee-free foreign transactions.

You will have to pay the exchange rate, but Norwich and Peterborough Building Society will not charge you for either using your card or withdrawing money from an ATM abroad.

Bear in mind that you must either have £5,000 in it or pay in £500 a month to avoid a £5 monthly charge for the account.

However, it is not just the free overseas spending that makes this account so appealing.

Other eye-catching deals include a £250 interest-free overdraft for six months when you switch, and free Sentinel Gold cover for your personal belongings.

Coverage includes up to £200 to replace a missing handbag, purse, wallet or briefcase if stolen and up to £11,750 emergency cash if you are stranded abroad.

You can claim up to £600 for replacement locks and keys and a 24 hour locksmith is on hand.

Credit, debit and store card issuers will also be contacted if your cards are lost or stolen - and you can claim up to £250 for personal money, if that is lost or stolen, too.

The final cherry on the cake is an offer which comes free with the account that allows you to trade shares at a discounted flat rate of £8.95 online or £14.95 over the phone.

Current account holders also have exclusive access to a range of savings accounts with preferential rates.

Watch out for

You long as you pay in £500, or maintain a balance of £5000, there is no monthly fee - otherwise you will be charged £5.

The account comes with a £250 free overdraft for the first six months for switchers but after that it charges hefty fees for borrowing beyond the free £10 buffer.

Agreed and unagreed overdrafts both incur interest at a rate of 17.9 per cent, as well as a monthly £5 fee. 

Unapproved overdrafts cost £19 a month, and paid and unpaid charges will clock up an additional £15 each.  

Cumberland Building Society’s Plus Current Account also charges no foreign transaction fees - but it is only available to locals

You can find a list of all Cumberland branches here.

Metro Bank - good for Londoners and Europe

Metro Bank's current account is a relatively small newcomer, proud of its customer-centric approach to banking. Its current account is a straightforward, no-frills option.

No overseas charges in Europe

If you travel a lot, it could be a great money saver – although you will have to pay the going exchange rate, Metro Bank will not charge you for using your card or withdrawing money from an ATM abroad.  

Metro Bank has unfortunately recently upped the fees for using your card in the rest of the world. The challenger bank currently pays less than most providers at 1.9 per cent for each transaction plus an extra £1 for a cash withdrawal.

From 25 July 2016, it will charge 2.5 per cent on card purchases – and £1.50 on cash withdrawals from ATMs.  

Watch out for

If you don’t live or work within the radius of the M25, this may put you off signing up because, at present, Metro only has a few branches - and most are in London and the South East.

Also, if you often find yourself overdrawn, you will need to take care.

Agreed overdrafts and unagreed overdrafts both incur interest at a rate of 15 per cent, which will be calculated daily on your account and applied monthly. There is no maximum, so watch out as interest will add up.

You will be charged £10 for paid and unpaid items.

Charges are capped at six a month - but bear in mind you may have to start paying interest on them if it tips you into the red. 

More to spend: Saving money on spending and cash fees means you will have extra for your trip

Credit cards

Most cards add around 3 per cent cost to the exchange rates banks themselves get.

You can avoid this by picking a specialist card, which won't apply non-sterling transaction fees or cash withdrawal charges. Make sure you repay in full to avoid interest. 

MBNA - Best for a low rate and no overseas fees

The recently released Everyday Plus American Express credit card comes with a low interest rate on purchases and transferred debt, plus it does not apply extra charges for overseas use.

This is the cheapest option available - but it has one major downfall - as an Amex card it may not be accepted everywhere.

What it offers:   

Using a credit card abroad is notoriously expensive, but the Everyday Plus American Express deal applies no fees for cash withdrawals in the UK or abroad or for foreign transactions, both of which typically incur extra charges of  3 per cent..  

All borrowing on the card clocks up interest at 7.4 per cent, much lower than the standard 18 or 19 per cent APR of a standard credit card.  

There is no handling fee for shifting existing debt from a credit card or money transfers to a current account. 

 Watch out: 

The credit card offers no 0 per cent interest periods on purchases or transfers. Despite the low rate interest can still quickly build up. 

Cash withdrawals will start clocking up interest immediately so make sure to pay them off as soon as possible. However purchases will not incur any interest as long as you repay before the date shown on your statement.

Cardholders will be charges £12 for a late payment, for each unpaid item and each time you go over your credit limit on your statement date. 

The card provider will only accept those with a good credit history, plus even successful applicants may not be offered the 7.4 per cent low rate.

This is because issuers only have to give 51 per cent of successful applicants the advertised deal. MBNA does however offer an eligibility checker to help applicants see if they are likely to be accepted for the card. 

Remember American Express credit cards are not accepted everywhere. 

Creation

Creation's Everyday Credit Card charges no fees for withdrawing money or spending overseas but it is a relative newcomer to the market.

Although slightly higher than MBNA's offering above, the provider charges a lower-than-average APR at just 12.9 per cent. 

What it offers

The card charges 12.9 per cent interest on balance transfers, purchases and cash advances - that's 6 per cent lower than a typical credit card.

Use the card to make a purchase or cash take out money from an ATM abroad and there are no extra foreign transaction fees or cash advance fees.

The provider also charges no handling fee for making a balance transfer but it comes with no introductory 0 per cent interest deals on transferred debts or on spending.

Watch out for 

Only those with the best credit ratings will be offered the low 12.9 per cent interest rate. Credit card providers only have to offer the headline rate to 51 per cent of successful applicants -this means 49 per cent of those accepted could get a worse rate.

You could be offered a rate of either 17.9 per cent or 21.9 per cent.  

As with all credit cards you will need to make sure to make repayments on time and avoid spending beyond your limit to avoid a £12 fee. 

Interest is applied immediately on all cash withdrawals so try to repay the amount in full as quickly as possible to minimise the cost. 

Purchases made abroad will not clock up any interest if you make sure to repay before the date shown on your statement.   

Halifax - Best for no fees and widely accepted

Halifax Clarity credit card has long been a popular option for no-frills overseas spending.

It could therefore be the best option for those looking for a card which will be more widely accepted than the MBNA American Express offering and for those who would prefer a better known card provider than Creation.

What it offers 

Halifax demands no extra charges for spending abroad anywhere or any extra for withdrawing cash at home and abroad.

Standard interest is set at 18.9 per cent. Although this is slightly more expensive than MBNA's Everyday Plus Amex card, the Mastercard-backed Clarity Credit Card is likely to be more widely accepted.

There is no annual fee - so there are zero extra costs as long as you pay off your balance in full every month.

Additional cards on the same account are available and you can manage your account online.

Watch out for

Interest is charged immediately at the card’s standard rate of 18.9 per cent on cash withdrawals, but you can minimise the cost by repaying in full as soon as possible. 

Purchases abroad don't incur any interest as long as you repay the amount by the date shown on your statement.  

Depending on your credit score applicants may be given a higher interest rate of either 21.9 per cent or 25.9 per cent.  

You will be charged £12 if you pay your balance late, have a payment returned or go over your limit.  

Saga - good for over 50s

Over-50s provider Saga offers a Platinum Credit Card which allows you to pay for goods and services abroad, without forking out for foreign currency fees on transactions.  

You will pay for taking out cash, however. 

No overseas charges 

Saga: Good holiday offers if you're over 50

Spenders using their Platinum card for spending abroad will not be charged any foreign transaction fees. 

Using an ATM overseas carries a 2 per cent (minimum £2) cash withdrawal fee. 

But unlike most credit cards cardholders will not be charged interest on their withdrawal for 55 days. 

The credit card offers nine months interest free purchases and balance transfers (with a 3 per cent balance transfer fee).

Interest then jumps to a representative 11.9 per cent APR (variable) on purchases. 

Saga offers some extra perks for over 50s holidaymakers. 

Use your Saga Platinum credit card on board any of Saga’s cruise ships, you will enjoy a 5 per cent discount.

In addition, if you book a Saga holiday with your Saga Platinum credit card you will only pay a 1 per cent transaction fee, rather than the standard 2.5 per cent cost. 

Saga Platinum credit card holders also receive exclusive discounts at the company's resorts and hotels.

Watch out for

You can enjoy up to 55 days of interest free credit on all withdrawals - at home and abroad.

But if you don't clear the balance on time interest will be charged from the date the transaction is debited to your account.

This will also apply to purchases after the 9 months introductory offer is over. 

Remember, although Saga will not charge you for your overseas spending, a local bank processing the cash withdrawal may apply a surcharge. 

Aqua Advance - best for those without a squeaky-clean credit rating

Sadly those struggling with a less-than-perfect credit rating can find it difficult to be accepted for the most competitive credit cards including when it comes to overseas deals.

But Aqua is offering a decent deal on it's Advance credit card which is designed for those who would struggle to be accepted elsewhere.

The card comes with a range of perks including fee-free foreign purchases. The card provider will also reduce the standard purchase rate for those that repay on time each month. 

Watch out for

Because the card is aimed at those with a low credit score it does come with high interest rates on borrowing, set at 34.9 per cent.

But those that repay on time it will drop the interest rate by 5 per cent each year for the first three years- bringing the rate down to 19.9 per cent.

Cardholders will also need to avoid withdrawing cash overseas as the provider charges a 3 per cent fee, set at a minimum of £3.

This is Money verdict:

Aqua's card is a good around deal for those who have be rejected elsewhere and are looking for a little more from their creditbuilder credit card. 

But with interest set at 34.9 per cent this card is only worth considering if cardholders are sure they will be able to clear the balance each month.

Aqua's guidelines as to who will be accepted state that you are unlikely to be accepted if you have had any CCJs in the past year.

Current Accounts Of The Week

5% in-credit interest

Classic Plus

£100 cashback when you switch

1st Account

3% cashback on bills

Reward Account

£100 cashback and £5 monthly reward

Reward Account

£150 to switch & up to £5.50 per month

Current Account