BE CARD SHARP ABROAD
British tourists overseas throw away £215m every year using their plastic
By Holly Thomas
SHOPPERS will throw away as much as £215million this year in credit card fees on purchases they make on holiday, says a new study by Abbey.
This year the average Briton plans to spend 14 days holidaying abroad and in this time will put an estimated £8billion worth of holiday purchases on to their credit card.
Abbey says that combined, hidden credit card charges add about 2.69 per cent to the cost of goods abroad. This means that for every £100 we put on our cards we are charged around £2.70.
Cash withdrawals when we are away also come with a fee each time you visit the hole in the wall of up to £5 a pop depending on your card provider.
This £215million in charges does not need to be wasted, because there are credit cards on the market which are free to use abroad.
They include the new Abbey Zero card, which is fee-free for purchases and cash withdrawals abroad. Normally Abbey’s foreign exchange fee is 2.75 per cent and its balance transfer and cash advance fees are 2.5 per cent or a minimum of £3. However, on Zero, these fees are waived.
Nationwide and the Post Office offer the same fee-free spending overseas. The Platinum card from Saga is free to use within Europe.
Debit cards typically come with lower charges but are not, as you might think, always “free” to use. Most banks charge about £1.50 every time you use the card overseas.
Nationwide’s Flex debit card is only available to the society’s current account holders at the building society but offers overseas cash withdrawals with no extra charges.
You can also save cash by using a pre-paid card which you load with cash before you travel. The cards bear symbols such as Visa and Mastercard, allowing you to pay for goods in shops at no extra charge.
From a security point of view they are good because these are standalone cards, not linked to any account in your name.
It has been reported that your card is more likely to be cloned if you’re in a foreign country. So if a pre-paid card if stolen while you are away, you simply cancel it. Your name does not even appear on the face of the card.
Pre-paid cards do, however, come with some charges. Withdrawing money from a cash machine usually costs extra and many charge an annual fee of about £10. But if you travel frequently even these could be worth your while.
Some cards only load sterling, but others allow you to use US dollars or euros.
The FairFX currency card, is a pre-paid MasterCard that can be loaded with euros or US dollars. It boasts it offers users “business level” foreign exchange rates, typically better than standard tourist rates.
FairFX’s card costs a one-off fee of £9.95 — free if you load it with at least £500. Cash machine withdrawals cost £1. If there is money left on the card after a trip away, users can save it for another holiday, use it for online shopping or simply withdraw sterling from a UK cash machine.
Other pre-pay cards on the market include the free Travelex Cash Passport card, which can be loaded with sterling, dollars or euros. There are no charges for loading this with cash but cash machine withdrawals cost £2.50.
If it is not used for more than a year but a balance remains on the card, Travelex will charge an “inactivity fee” of £2.50 a month. Although this is not charged on cards with a zero balance.
Watch out for cards that charge every time you load money onto them.
There is of course the trusty old friend — the traveller’s cheque.
However, they are not so user-friendly, given that you need to carry your passport around for ID and find somewhere where they can be exchanged for cash — not always easy off the beaten track.
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