Review: The Post Office Credit Card – a great option for travellers

Key link:  The Post Office credit card application page

Representative APR 17.8% variable.  The Post Office credit card is provided by Bank of Ireland UK.

Head for Points mainly looks at credit cards which give you frequent flyer miles or hotel points when you spend on them.  After all, that is what this site is all about!

However, it is important to remember that credit card miles are not free miles.  You need to compare the miles you get against what you could get from a cashback credit card.  When travelling abroad, you need to see if the miles you earn justify the foreign exchange fee charged by your credit card company.

It is almost always a bad idea to use a mileage card for overseas spend.  This is because all miles and points cards – and indeed almost all other UK credit and debit cards – charge a foreign exchange fee of 2.75% to 2.99%.  Most card issuers hide this fee so you don’t realise you are paying it, because they simply adjust their exchange rate by 2.75%-2.99% rather than breaking the fee out.

This is why I like the look of the Post Office credit card.

It does NOT offer you any loyalty points when you use.  It DOES, however, make everything you buy abroad up to 2.99% cheaper than it would be if you used a different credit card.  And that is a substantially better deal!

Take a look here at the home page for the Post Office credit card.

There are about five credit cards on the market which do not charge foreign exchange fees on purchases.  However, some of them have an annual fee (eg Lloyds) whilst others (eg Nationwide) are only available if you have a cheque account as well.

The Post Office credit card keep everything nice and simple:

There is no annual fee for the card

There is no foreign transaction fee.  Your transactions are converted at the wholesale exchange rate set by MasterCard, which to all intents and purposes is the ‘spot’ rates.

You will not pay a ‘cash advance’ fee when you use the card at a Post Office branch to buy foreign currency

You pay 0% interest on all purchases for the first three months

As a MasterCard, it is widely accepted wherever you travel

The only point which is not made entirely clear is that the ‘no FX fee’ deal only applies to purchases.  If you use your credit card to withdraw cash from a foreign ATM, you will be charged a 3% foreign exchange fee as well as the standard cash withdrawal fee.  This is not a major problem for most people, though.

Overall, I rate The Post Office credit card as a worthwhile addition to your wallet when travelling.  You won’t earn any airline miles or points when using it, but you will get a 3% smaller credit card bill when you get home – and I know which is the better deal.

You can apply online via the link above – there is no need to visit a Post Office branch to sign-up.