Credit Cards & Loans
Credit card charge risk for Brits abroad
Brits abroad can be hit with steep credit card bills when they return home as they fail to understand the charges involved, according to comparison site MoneySupermarket.com.
Holidaymakers using their credit card abroad can make costly mistakes and could risk turning their holiday into a financial nightmare, simply by not understanding the charges involved in using plastic abroad.
More than a half of Brits have used a credit card abroad, with 57% failing to understand the additional charges as well as transaction fees and interest on their card.
Bob Atkinson, travel expert at MoneySupermarket.com said: “Some debit and credit cards should only be used abroad in an emergency unless they are specifically designed for overseas usage.”
“If you are planning to use cards abroad then it pays to be clued up on all the charges involved in doing so before you jet off. Retailers offer to convert the card transaction into sterling at point of sale, a practice known as dynamic currency conversion.
“It is best not to opt for this as retailers generally offer unfavourable rates of exchange compared to those on a credit, debit or prepaid card. Many airlines also offer this option for on board purchases. Avoid it at all costs.”
54% of those polled were also not aware that interest is charged immediately from the time of withdrawing cash from an ATM while abroad, and that that is on top of the existing transaction fee.
Atkinson continued: “It’s extremely worrying that such a high number of holidaymakers are not aware of the extra fees or charges that apply when using a card for purchases or withdrawals, or that they may not be getting the best exchange rate.
“Every major credit card, bar one, charges interest from the date of withdrawing cash at an ATM, many have loading fees for over the counter purchases, but you should always check before heading abroad. Failing to do so means you will probably face a hefty bill on the doormat on your return when in fact you thought you had snared a bargain.”
Holidaymakers are being advised to shop around for the best credit cards, as there are cards that are designed specifically for spending abroad, which could help consumers benefit from consistently better exchange rates, coupled with the safety of using a pin protected card in a foreign land.
