Many people don’t understand the dangers of plastic, says Claire Smith
HOLIDAYMAKERS have been warned to avoid using their credit cards abroad because they could end up spending more than they bargain for.
Research suggests UK holidaymakers are likely to rack up £53m in credit card charges – which they may not be expecting.
One of the biggest errors is to use a credit card to withdraw lots of small amounts of cash – which may incur charges on each transaction.
Brits spend an average of £784 while on holiday – but take less than half of this (47 per cent) as local currency.
More than a fifth of holidaymkers (22 per cent) have been forced to take cash out using a credit card – which can carry fees of up to 2.99 per cent – or £2.99 for a £100 withdrawal.
Seven per cent of consumers do not understand the costs of using cards abroad, while more than a quarter (28 per cent) use whatever card they have in their wallets, according to the research by uSwitch.com.
Michael Ossei, personal finance expert at uSwitch.com, says: “While some holidaymakers are starting to wise up and ensure that they make their spending money work as hard as possible for them, too many still risk getting burnt for using cards while abroad. 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.
“The best way of tackling holiday finances is to start thinking about your spending money ahead of when you go. 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 overseas fees. Alternatively, get a pre-paid currency card which allows you to top up foreign currency, some with no commission charges and can be used like a standard credit card abroad.
Gillian Edwards, a spokesperson for ABTA, the travel association, said: “The ease and convenience of using debit and credit cards overseas makes this a popular choice for holidaymakers, but also one where a lot of hidden charges can apply. We’re so used to using plastic every day in the UK that it’s easy to forget that what might be free here may cost you abroad.
“To avoid a nasty surprise in their bank account on return to the UK, savvy holidaymakers can make significant savings by doing some research before they go. To avoid being stung by hefty charges, holidaymakers relying on plastic should always check what fees apply with their card provider before going abroad.
“When using your card abroad, you may find that it’s cheaper to take out a large chunk of cash at the start of the holiday to avoid individual withdrawal fees each time you use a cash machine or make a purchase in a shop.”
One factor which could help holidaymakers stretch their money further is the strength of the pound in worldwide markets. According to research by Post Office Travel Money, 80 per cent of world currencies are weaker against the pound than they were last year.
Post Office Travel Money head Andrew Brown said: “There are very few places where the pound is not packing a stronger punch this year. Our advice is for people to keep a close eye on exchange rates for all the destinations they are considering.”
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Thursday 23 May 2013
Temperature: 5 C to 10 C
Wind Speed: 25 mph
Wind direction: North west
Temperature: 3 C to 13 C
Wind Speed: 20 mph
Wind direction: North east