Many Britons do not realise how much they are charged for using their plastic abroad, as they clocked up a massive £725.75 million last year, according to research from money search engine Moneyfacts.co.uk.
Most debit and credit card providers charge for transactions and cash withdrawals, leading to UK travellers spending £12.2 billion on credit cards last year, amounting to £335.5 million in charges, and £10.4 billion was spent on debit cards, which, assuming this is divided between withdrawals and transactions, totals £390.25 million in charges.
Lisa Taylor, analyst at Moneyfacts.co.uk puts it down to the decreasing popularity of travellers cheques and the convenience and security of taking plastic abroad. “However,” she warns, “many travellers are unaware of the level of costs associated with using debit and credit cards whilst abroad.
“We take it for granted that using our debit cards is free of charge whilst on home soil, so it’s not surprising that some consumers are shocked when they see how the charges stack up after using their card on holiday.”
Typically, credit card providers charge 2.75% of the amount tendered for the privilege of using your card abroad to pay for goods and services; withdrawing cash with it will cost 2.5% on average, as it does in the UK, but you will also be charged interest from the date of the transaction, even if you pay your next bill in full. Using your credit card abroad will entail a £2.756 charge per £100 you spend.
Unlike in the UK where it is usually free of charge, withdrawing using debit cards abroad will cost 1.5%, as well as a further conversion fee of 2.75%. Shopping will also cost you extra, with a common retail transaction of £1.50 plus the same conversion charge of 2.75%. Debit card usage abroad costs £4.25 per £100 spent.
The average Brit spends more than £10 a year in commission charges as year, not taking into account exchange rates. Moneyfacts.co.uk recommends managing your spending money effectively and shopping around to find credit and debit card providers that do not charge extra when you take them abroad.
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