30 May 2007
Overseas purchase fees could catch consumers unawares this year with many of the larger credit card providers introducing higher charges for making withdrawals and paying for goods while abroad.
Lloyds TSB and Royal Bank of Scotland customers will find that they are being charged an additional 'transaction fee' of 1 or 0.75p respectively, every time a debit card purchase is made overseas, which will generate around 25 million for Lloyds alone this year.
In addition, NatWest are set to increase their fees from June 1st from the current 75p per purchase to 1.25. Mike Naylor, Personal Finance Expert at independent price comparison and switching service, uSwitch.com, urged consumers to check all the conditions of their cards' usage before taking them on holiday.
Speaking about NatWest's new fees, Mr Naylor commented: "As well as the increased debit card purchase fee, the maximum fee for cash withdrawals has also risen by 1 to 5. Any NatWest customer travelling abroad should think seriously about switching to a card which offers a much better deal for overseas cash withdrawals and purchases."
There is some relief for Brits abroad however, with some providers still refusing to overcharge their customers.
"The Post Office and Nationwide have credit cards that offer a good solution for spending abroad, as they do not charge transaction or exchange rate loading fees on foreign transactions," Mr Naylor advised.
This news comes just a day after it was revealed that HSBC had been accused of confusing its customers by telling them that they can withdraw money free of charge when on holiday.
In fact, though the withdrawal fees for its packaged current account holders are waived, a charge of 2.75% is added to the foreign currency exchange rate the bank receives. This so-called loading fee only appears as a footnote at the end of the advert.