Overseas credit cards

If you're planning to use a credit card overseas then watch out for hefty charges.

Beware currency conversion fees

If you use your card abroad, expect to pay a 'currency conversion fee' of, typically, 2.75% of the value of each transaction. In other words, with most credit cards, goods costing the equivalent of £100 will cost you £102.75. Other hidden charges can result in you paying up to £6 for every £100 that you spend on plastic. A small number of credit cards don't levy this fee, such as those from Nationwide Building Society, so if you're planning to flex your plastic abroad, make sure that you check out the small print, and your alternatives, in advance.

One more currency trap

Also, watch out when you're travelling if a shop, restaurant or hotel offers you the chance to pay in sterling rather than in the local currency. This is a fairly recent trend and the exchange rates used if you opt to pay in sterling usually offer very poor value for money. Indeed, they can be the equivalent of double the standard 2.75% currency charge made by most credit cards.

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