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GOING away? You'll need one of the best credit cards for travel.

What's wrong with most cards abroad?

Like teenagers on a school trip, most debit and credit cards become very different beasts as soon as they step outside the UK.

The credit card that rewards you so kindly and allows you to pay off purchases interest-free on its home turf might charge a fee of at least 2.75% on every purchase abroad and no rewards for your trouble.

And your no-worries everyday debit card could be even worse: some charge up to £1.50 on every purchase.

ATM withdrawals are also expensive.

As in the UK, most credit cards charge for cash withdrawals and the transactions accrue interest at a much higher rate than purchases. Unlike the UK, though, debit cards are at it too and usually charge a fee of around 3%.

While the best credit card for travel is generally always the cheapest option for use abroad, for more on the non-credit card options see our guide to which is cheapest abroad: prepaid, debit or credit.

All in all though, it's well worth checking your current cards' policy before going away. All the above shenanigans mean that, for most of us, a credit card for travel is now as much a holiday essential as a bottle of a suncream and a raffia donkey.

The best credit cards for travel

However, like the perfect suncream, the perfect credit card for travel takes some deliberation if you want to avoid getting burnt.

Annoyingly, there are few, if any, credit cards that can cover all your normal transactions abroad and offer travel extras such as insurance to boot.

Some do a better job than others but we've set out the credit cards available in groups to reflect the fact that it's a good idea to work out the main benefit you're looking for - whether it's 0% commission on use abroad or free travel insurance - look for that first and then worry about other benefits from within the pool of credit cards available.

Making purchases abroad

The best cards:

• Post Office credit card*
• Sainsbury's Gold credit card*
• Saga Platinum credit card**
• Halifax Clarity credit card**
• Santander Zero credit card (no longer open to new applicants)

*Click through for the full cost of credit.
**Please visit the provider for the cost of credit.

All of the above are frequently cited as some of the best credit cards for travel because they charge 0% commission fees on purchases worldwide.

To see how they work, let's look at just one of them in more detail:

Post Office credit card
	0% commission on use abroad, plus fee-free foreign currency purchased from the Post Office.	Apply here »
Representative Example: 16.9% p.a. variable on purchases. This is equivalent to 16.9% APR representative variable based on a credit limit of £1,200. Post Office Limited, 148 Old Street, London, EC1V 9HQ.

The Post Office credit card is a good example of how 0% commission doesn't necessarily mean good rates abroad across the board.

For example, cash advances are a bit of a blind spot. As in the UK, cash advances abroad are currently subject to a 24.1% p.a. variable interest rate with no interest-free period so they're best avoided altogether.

And, as of November 2010, it's not possible to 'preload' the card balance.

On the plus side, foreign currency purchased from the Post Office is also fee-free (although not interest free) so there's a good option for cash, albeit a slightly less convenient one.

It's worth nothing that there is another option for 0% purchases, not listed above because it's a bit of an oddball:

• Nationwide credit card [click through for cost of credit]

With the Nationwide credit card, customers must earn their 0% use abroad.

For every £5 spent on the credit card in the UK, cardholders earn £1 to spend with 0% fees abroad. The travel spending balance is shown on the account statement but is well worth taking note of before you travel: any purchases made abroad over the 'earned balance' will be charged a 2% fee.

All in all though, while Nationwide used to offer one of the better deals for use abroad there are now much better alternatives.

Making cash withdrawals abroad

The best cards:

• Sainsbury's Gold credit card*
• Saga Platinum credit card**
• Halifax Clarity credit card**
• Norwich & Peterborough debit card
• Metrobank debit card

*Click through for the full cost of credit.
**Please visit the provider for the cost of credit.

These five are currently the ones to watch for cash withdrawals abroad.

Norwich & Peterborough and Metrobank are straightforward no fees abroad debit cards, the simplest to understand.

However, you have to open their current accounts to take advantage of their rates. In N&P's case that means taking some care to actually use the account. With the Gold Lite account you must make five transactions a month or keep an average balance over £5,000, to avoid a £5 fee. Gold Classic account holders must pay £500 into the account every month or face the same £5 charge.

In Metrobank's case it means living in London. They've only got branches there so far.

The credit cards, as is their nature, are a little more complex.

The Sainsbury's Gold credit card currently doesn't charge a cash withdrawal fee and, unusually, there's an interest-free period on cash advances so you can pay back in full to avoid interest altogether.

However, there is a £5 monthly fee to hold the card so you'll need to make sure you can take advantage of its other benefits (e.g. travel insurance, see below) too.

Halifax Clarity makes the cut because it doesn't charge a fee for cash advances and, although interest is charged whether the balance is repaid in full or not it's currently at a fairly low rate (visit Halifax for the exact current rate).

Let's look at Saga's credit card in more detail.

Not only does Saga's Platinum credit card offer 0% commission on foreign purchases but cash withdrawals have the same standard interest-free period as purchases (i.e. it's possible to pay off the whole balance interest-free).

The downside is that there's still a fee (2% of the cash advance amount, minimum £2) but without interest when you pay off in full it still beats most other credit cards.

Note also that the card is only available to those aged fifty and over so if you haven't quite reached your third age you'll have to look elsewhere.

Travel extras

The best cards:

• Sainsbury's Gold credit card [click through for cost of credit]: multi-trip worldwide travel insurance
• All Barclaycard credit cards: free single trip travel insurance when you book via Barclaycard Travel Service
• Nationwide debit card: annual European travel insurance
• Barclaycard debit card: worldwide multi-trip travel insurance with Additions Active account

Travel insurance sold alongside debit and credit cards has a bad name and for a good reason: cardholders often assume that they're covered when they're not and end up losing out if they haven't taken extra insurance to cover themselves.

Also, watch out for travel accident insurance which is not the same as full travel insurance and always be careful to check the policy in full before assuming that you're covered.

Having given that warning, however, we should note that the policies above are, actually, offering a rather good amount of cover.

Let's run through the various benefits available.

Barclaycard offer single trip travel insurance for you and up to 5 other friends or family members travelling together for trips between 2 days and 3 weeks. Extreme sports aren't included.

However, the catch is that the trip to be covered must be booked through the Barclaycard Travel Service and paid with the Barclaycard credit card. If you could get a cheaper holiday elsewhere or you'll end up paying interest by paying this way it could be a false economy.

Additionally, while Barclays do exclude on age and pre-existing medical conditions, they will offer a discount off a more suitable policy instead.

The Barclays Additions Active current account also offers worldwide travel insurance for trips starting and ending in the UK and lasting no longer than 31 days.

However, the account has a £15 monthly fee so unless you can take advantage of its other benefits it's unlikely to be worthwhile.

Nationwide's free multi-trip European travel insurance is for their Flexaccount customers who are 75 or under and pay at least £750 into the account every month.

It's a pretty standard policy with a low excess of £50 should you ever need to claim. Note that Europe is pretty broadly defined (it includes the Canary Islands, Syria, Turkey, Iceland, Azores, Tunisia, Egypt, Israel) and you can upgrade to worldwide cover, cover a family or cover winter sports for an additional premium.

Finally, the Sainsbury's Gold credit card covers two adults (under 65) and up to six children worldwide. 17 days of winter sports cover a year is included.

As we've noted above, the Gold credit card has a £5 monthly fee but, as long as you're covered and you'll use it, £60 is not a bad deal for an annual policy, especially considering the rates offered for actually using the card abroad as well.

Before travelling - check out our full guide to using credit cards abroad here, which covers some helpful tips for before you leave as well as while you're away.

Did we miss anything? Let us know in the comments below.

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