20 August 2007
Britons on holidays abroad spend an average of £759 million in charges for using their credit and debit cards, a new report has uncovered.
According to a poll by uSwitch, UK holidaymakers spend £16.4 billion on their credit and debit cards as well as withdrawing more than £6.6 billion in cash.
And this situation is about to worsen, uSwitch claims, with new charges introduced by UK banks.
LV= is set to charge customers a 3% foreign exchange fee from the end of September, while HBOS will be increasing its usage charge from 2.75% to 2.95% starting from next month.
Recently Halifax upped its charges for overseas transactions by imposing a £1.50 charge on using a debit card to pay for goods as well as withdrawals on credit cards.
What is more, Lloyds TSB and Goldfish have also increased their fees for overseas transactions, from 2.75% and 2.99% to 3% respectively.
Customers of RBS and NatWest have also seen their transaction fees rise from 75 pence to £1.25, while the fee for cash withdrawals has risen from £4 to £5.
"Holiday spending can be difficult enough to budget for at the best of times, without the bill creeping up by way of these hidden charges," Mike Naylor, Personal Finance Expert at uSwitch.com explained.
"It is possible for consumers to reduce the amount they will pay in fees, or avoid paying them altogether, if they take a little time to research the credit card market before going away and make sure that they are packing the right plastic. In the long term, it may end up being more sensible for them to have two separate credit cards - one for UK use and one specifically for using abroad."
He advised: "As a nation we now prefer to pay with our plastic rather than use cash. Consequently, when we go abroad most of us will not give it a second thought when taking out a credit or debit card to pay the bill.
"However, at the very least consumers should make sure that they are fully aware of the additional charges involved when they use their card overseas, so that they are prepared when these unwelcome fees appear on their statement."
© 2008 Adfero Ltd
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