Charges soar for overseas cardholders
Holiday makers should bear in mind that using debit and credit cards abroad comes at a price, according to price comparison site Moneyfacts.
Michelle Slade, analyst at Moneyfacts, said that in the wake of travellers cheques becoming less popular, more people are resorting to plastic power when they go abroad. However, research from Moneyfacts showed that credit card companies charge customers as much as 2.99% for purchases and cash transactions in foreign countries.
Slade said: “Taking cash out on your credit card is never advisable, even in the UK, as not only is the interest rate much higher than on purchases but you will be charged the interest from day one. On top of this you will be charged a cash handling fee as well as the foreign usage charge if the cash is taken out abroad.”
Debit cards broadly follow the same pattern when used abroad, with some providers charging for both retail and cash transactions. Slade added: “Because in the UK we have become accustomed to free banking, many people automatically assume that they will not be charged for using their debit cards abroad. This is not the case and some lenders charge customers for both retail and cash transactions.
“With everyone concentrating on enjoying themselves rather than concentrating on what they are spending, overseas charges can soon mount up. Customers could find their balance much lower than expected when they get home if they are not careful.”