Fees for all?
Unsuspecting Brits going abroad this summer can expect to pay a bundle on ‘hidden’ charges when they spend on their cards. Mike Collins urges them to wise up and avoid the sting
With many people heading for the Continent this summer, including the army of football fans going to Germany to watch the World Cup, price comparison company and switching service uSwitch.com is urging people to make sure that they are packing the right plastic in their wallets before they leave.
uSwitch.com estimates that British holidaymakers will spend over £86bn on their credit cards while they holiday in Europe this year. Moreover, they will withdraw £7.9bn in cash, costing them an additional £576m in ‘hidden’ charges.
Nick White, head of personal finance at uSwitch.com, says: “Holiday spending can be difficult enough to budget at the best of times, without the bill creeping up by way of these hidden charges. It is possible for consumers to reduce the amount they will pay in fees, or avoid paying them altogether, if they take a little time to research the credit card market before going away and make sure they take the right cards.
“In the long term, it may end up being more sensible for them to have two separate credit cards – one for UK use and one specifically for abroad.”
There are a number of fees that consumers should be aware of when they use their cards overseas, including a ‘loading’ fee – which card issuers claim pays for the administration of the transaction – a transaction fee charged by the card issuer, a cash withdrawal fee, again charged by the card issuer and a ‘Dynamic Currency Conversion’ fee, which local retailers can levy if you choose to pay in the local currency.
“All the above fees point to the conclusion that card issuers see us as cash cows,” says financial expert Martin Cunningham. “My advice is to look at which cards minimise the effect of the ‘sting’ and take those away with you.”