Using Your Tesco Credit Card While Travelling Abroad in 2024: Fees, Benefits, and Alternatives

Are you planning to use your Tesco credit card on your next trip abroad? Well, prepare for a few potential headaches: many Tesco customers have reported unexpectedly high fees on their statements after using their credit cards while travelling overseas.

Fortunately, there are a few alternatives if you prefer low-cost holiday spending. In this post, we walk you through the fees and exchange rates you'll meet when using your Tesco credit card abroad and offer savvier alternatives to use instead. So, whether planning a weekend getaway, a business trip, or a dream vacation, read on to learn how to make the most of your card spending while abroad!

Using Your Tesco Credit Card Abroad

It should go without saying that credit cards are versatile tools that you can use to handle all kinds of financial transactions while on holiday abroad. This is no different with Tesco's range of credit cards, all of which enable you to:

• Pay at point-of-sale machines in foreign countries,
• Withdraw local cash banknotes from foreign ATMs,
• Book or handle deposits for car rental agencies, hotels, or flights.

In addition, some Tesco credit cards also let you take advantage of travel insurance, rewards, cashback, and other exclusive benefits while travelling abroad. It's always a good idea to check what benefits might apply to you before you travel so that you know what you can and cannot expect to take advantage of.

Tesco Credit Card Fees Abroad

Although they're easy and convenient to use abroad, Tesco credit cards come with some costs you should consider before travelling abroad. We've summarised them below (ignoring non-travel-related costs like annual fees, cash advance, and interest charges):

Everything considered, these fees can lead to surprisingly high costs when travelling abroad. Let's break them down with a typical example:

Point of Sales Transactions

Suppose, for example, you're on holiday in Paris and decide to spend €100 on a boutique fashion item you like. You pay with your Tesco credit card. The first thing that happens behind the scenes will be the conversion of your pounds into euros. Fortunately, this occurs at the Visa or Mastercard exchange rate (generally within 0.3% of the actual mid-market exchange rate) without Tesco charging its own exchange rate. This means you won't pay much for exchanging currency, and assuming your credit card is a Mastercard, you'd be paying £88.79 (at Mastercard's rate) instead of £88.49 (at the mid-market rate) on the final statement at the time of writing. Not a big deal, right?

However, it doesn't end there. Next, Tesco will hit you with a 2.75% foreign exchange fee. This fee is relatively high and leaves the final cost on your bank statement at £91.23 (2.75% or £2.44 higher than a fair exchange). This may not sound like a lot, but consider that you'll be hit with this fee every time you tap your credit card, so it all stacks up quite quickly.

Cash Withdrawals

The costs are even more profound when using your Tesco credit card to withdraw cash. Sticking with our example, suppose you next wanted to withdraw €1,000 to get you through a few more days of Parisian spending. Here, you would again pay the Mastercard exchange rate (£4.18 for a €1,000 conversion at the time of writing) plus the 2.75% foreign exchange fee (this time amounting to £24.41). On top of this, you'd then pay an additional 5% on the remaining amount (or £36.40 in this case).

After factoring in this combined £64.99 (or over 7%!) fee, the pound conversion on your bank statement would be a whopping £952.87.

Better Alternatives

Fortunately, there are much more affordable ways to spend your pounds while travelling to Paris or anywhere else in the world. Below, we suggest three world-class UK-based alternatives for you to consider depending on your individual needs and preferences:

Wise: Best for Tapping Your Card Abroad

Wise's fee-free debit card is an excellent way to spend money while abroad from the UK because it allows you to pay in foreign currencies with no hidden fees and offers competitive exchange rates. It's almost always a far better deal than Tesco for overseas spending, and you can use it next to your Tesco current account whenever you leave the UK.

• Multi-currency balances: Yes (available in 56 currencies)
• Foreign exchange margin: 0%
• Foreign exchange fee: 0.2% - 1%
• ATM withdrawal fee: 1.75%
• Best for: Card payments in a foreign currency

Revolut: Best for ATM Withdrawals

Revolut's debit card is another good way to spend money while abroad because it allows you to pay in over 150 currencies at the real exchange rate (although fair use limits and weekend surcharges may apply), and additional features like budgeting tools and travel insurance (on the paid plans).

• Multi-currency balances: Yes (available in 35 currencies)
• Foreign exchange margin: 0%
• Foreign exchange fee: 0.5%
• ATM withdrawal fee: 2%
• Best for: Foreign cash withdrawals, especially under £200 per month

Starling Bank: Best Complete Bank Alternative

Starling Bank is a first-class online bank whose debit Mastercard is an excellent way to spend money abroad because it offers no fees whatsoever on any foreign currency spending. It also provides an excellent current account which we've ranked as the best online bank in the UK.

• Multi-currency balances: No
• Foreign exchange margin: 0%
• Foreign exchange: 0%
• ATM withdrawal fee: 0%
• Best for: A complete bank account alternative to Tesco