British holidaymakers risk running up over £422 million in stealth charges just for using their debit or credit card abroad, according to uSwitch.com, the independent price comparison and switching service. While a fifth of holidaying Brits (21%) intend to take money out of foreign cash machines using their debit card, one in four (38%) will risk being stung by fees by using their credit cards to pay for things on holiday.
However more than one in ten (11%) Brits don’t understand the costs involved and that they vary between cards, while only a third (35%) research the best credit card to use abroad and make sure it’s in their wallet. Credit cards have the convenience factor, but paying on plastic could see holidaying Brits handing over an eye-watering £186 million in fees and charges to credit card companies.
Even those who avoid expensive credit and debit cards may still be left short-changed. Over two thirds of Brits (68%) will be paying for this year’s holiday expenses with cash they changed up before they went. However, 13% are unlikely to benefit from the best exchange rate – leaving it to the last minute to change their money. In fact 16% rarely or never check to make sure they’re getting the best rate – and less than half (47%) ensure they get the best deal every time. Getting the best exchange rate is a top priority for only three in ten Brits (30%) – a fifth (16%) chose convenience.
Even on holiday, one in ten Brits (11%) will be watching the pennies, choosing a payment method that will allow them to keep a closer tab on their spending. Just a fifth of Brits (20%) don’t budget their holiday spending, but even those who do aren’t always successful as 14% still manage to overspend.
Stefan Maryniak, personal finance expert at uSwitch.com, comments: “Sorting out your spending money is often the last thing on a holidaymaker’s list, but if you don’t do it or leave it to the last minute it can cost you dear. 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. If you plan ahead you’ll end up with more money in your pocket.
“The best way of tackling holiday finances is to start thinking about your spending money when you book the holiday. 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 travel fees. If you do have to withdraw cash, use your debit card as credit cards often carry higher fees, and you’ll be charged interest straight away. 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. The best thing about currency cards is you only spend what you load on them so you are guaranteed not to overspend.
“If you’d prefer to pay with cash, make sure you get the best rate on your money. This will normally involve pre-ordering your currency and collecting it before you travel. Avoid changing currency at the airport or straight from your debit card as commission fees could cost you that well-earned poolside drink.”
Source : uSwitch.com
