Beware! Brits risk forking out millions for overseas bank charges

29/07/2011

British holiday makers planning on taking trips abroad this summer run the risk of clocking up huge fees just for withdrawing their cash.

According to a survey carried out by uSwitch.com, a fifth of holidaying Brits, 21 per cent, intend to take money out of foreign cash machines using their debit card. While one in four, 38 per cent, will risk being stung by fees for using their credit cards to pay for things on holiday.

Worryingly, more than one in ten Brits do not understand the costs involved and that they vary from card to card - with only a third researching the best credit card for foreign withdrawals, making sure they don’t leave without it.

Stefan Maryniak, personal finance expert at uSwitch.com, said: "Sorting out your spending money is often the last thing on a holidaymaker's list, but if you don't do it or leave it to the last minute it can cost you dear. Fees from using your credit or debit card abroad can be the holiday souvenir from hell, but there are a number of ways to avoid them. If you plan ahead you'll end up with more money in your pocket.”

Although it may be easy and convenient to flex credit cards on holiday, according to uSwitch, it could end up costing Brits £186 million in fees and credit card charges.

Even those who think ahead won’t necessarily escape charges relating to their spending money. Sixty-eight per cent will be paying for this year's holiday expenses with cash they changed up before they went. However, 13% are unlikely to benefit from the best exchange rate - leaving it to the last minute to change their money.

In fact, 16 per cent admitted rarely or never checking exchange rates to make sure they are getting the best deals - and less than half, 47 per cent ensure they get the best deal every time.

Although getting the best exchange rate is a top priority for a meagre 30 per cent of Brits with a fifth, 16 per cent, choosing convenience as a top priority.

Ms Maryniak adds: "The best way of tackling holiday finances is to start thinking about your spending money when you book the holiday. If you like the convenience and security of paying on plastic, check with your current credit and debit card supplier to see what their foreign usage fees are, and shop around to see if you can get a credit card with low or no travel fees. If you do have to withdraw cash, use your debit card as credit cards often carry higher fees, and you'll be charged interest straight away.

"If you'd prefer to pay with cash, make sure you get the best rate on your money. This will normally involve pre-ordering your currency and collecting it before you travel. Avoid changing currency at the airport or straight from your debit card as commission fees could cost you that well-earned poolside drink."

Tags; Budgeting Advice, Advice on Travel Costs, Credit Card Lifestyle,

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