Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Using Your Credit and Debit Cards Abroad Could Cost You a Small Fortune…

ConsumerWatch / Credit Cards & Scoring Jul 26, 2007 - 06:12 PM GMT

By: MoneyFacts

ConsumerWatch

Lisa Taylor, analyst at Moneyfacts.co.uk – the money search engine, comments: “With travellers cheques becoming less popular more of us are opting for the convenience of using our plastic when we jet off on our holidays. However many travellers are unaware of the level of costs associated with using debit and credit cards whilst abroad.

“We take it for granted that using our debit cards is free of charge whilst on home soil, so it’s not surprising that some consumers are shocked when they see how the charges stack up after using their card on holiday. With terms such as retail conversion charge, and foreign usage charge, it can be confusing for travellers to know exactly what types of fees they will be liable for, and how much it’s likely to add to the cost of their trip.


“Last year £12.2 billion** was spent on credit cards by UK travellers overseas, resulting in a staggering £335.5 million in card charges, a figure that could be even greater, depending on how many of these transactions were to withdraw cash. A slightly smaller amount of £10.4 billion** was spent abroad on debit cards – and assuming an even split between retail purchases and cash withdrawals, this would total £390.25 million in charges. In total using our cards overseas cost UK travellers a massive £725.75 million. To put this figure into perspective this could pay for over 300,000 family holidays or buy over 70 million bottles of whisky at the duty free.

“So what charges can you expect to pay?

Credit cards
Foreign Usage Fee: Typically this will be a charge of 2.75%, this will be charged on both purchases and cash withdrawals. So for every £100 you spend an extra £2.75 will be charged.
Cash withdrawal charges: These are the same as you would pay in the UK, and will be charged in addition to any foreign usage fee. There is an upfront withdrawal charge, typically around 2.5% (with a minimum charge amount), and as well as this you will be charged interest from the date of the transaction, even if you repay your next statement in full.

Debit Cards
Withdrawing cash: If you use your debit card in an ATM you may face two charges: A cash conversion charge, typically 2.75% and also cash transaction charge generally 1.5%. So for every £100 you withdraw it could cost an extra £4.25.
Retail Spending: Again you could be faced with two charges for spending with your debit card in a shop. The first is a retail conversion charge, typically 2.75%, the second and less common is a retail transaction charge which can be £1.50 per transaction in some cases.

“While credit and debit cards can be a convenient way to manage your holiday spending, they can also put a dent in your holiday budget if you’re not careful. The average holidaymaker spent over £10 on commission fees in 2006 – and this is without taking into account the exchange rates used for converting the transactions.

”Using your card overseas can be a simple and hassle free way to manage your money on holiday, and with Nationwide debit cards, or the Nationwide / Post office credit cards it can be cost free too. But with any other cards you need to spend wisely, watch how and when you use your cards, small and frequent withdrawals from an ATM abroad can prove far more costly as opposed to a couple of withdrawals for larger amounts.

“But what does the 2.75% loading fee cover and who receives this commission payment - is it the card issuer or split with the ATM provider or retail outlet overseas? It is strange that a couple of card providers are able to provide the service without imposing the 2.75% fee, the fact that they are able to absorb the cost and not push it on to the customer makes you think that the cost involved may actually be far less than the amount being levied.”

Moneyfacts.co.uk top tips to overseas spending on your cards

1. Use a Nationwide debit card for any of your cash withdrawals – it’s the only debit card which will not cost you.
2. Use either your Nationwide debit card, or take advantage of your interest free days and use either a Post Office or Nationwide credit card for your purchases
3. Try not to use your credit card to withdraw funds overseas, as even the ‘free’ foreign usage cards will incur a cash withdrawal charge and interest from the date of withdrawal, even if you pay your card off in full.
4. Take a small amount of currency with you – as it may take a day or two to find a convenient ATM
5. Make sure you have a record of lost and stolen contact details for your card providers
6. Two weeks before you travel give your card provider a call, just to let them know where you are travelling to and for how long – this will lower the chances of your card being stopped if they consider regular foreign usage to be unusual activity on your card
7. Don’t rely on one card – if this is lost of stolen it may take a while for a replacement to reach you – keep a different card in your hotel safe
8. Often cash withdrawal fees will have a minimum charge, so withdrawing larger amounts less frequently is a more cost effective way to spend.

EXAMPLES: Credit Card Foreign Usage Charge

* All cards excluding i24 MasterCard where there is no charge for foreign usage. However, the card does have a £275 per annum fee and require an income of £50K plus.

EXAMPLES: Debit Card Foreign Usage Charge

• New rate w.e.f. 30.7.07
** Source APACS

www.moneyfacts.co.uk - The Money Search Engine

Money Facts Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Deborah Noreen Williamson
18 Dec 09, 04:30
Natwest Debit Card

Hi, I was sent over a new current account card from England to Australia, where I currently live. I have lost the pin number that was sent with it, what do I do now as I want to get money out or transfer the money online and cannot do this because the card has yet to be activated? Please help!


Jeff Capes
19 Dec 09, 13:05
Natwest Debit Card

Phone the bank and tell them what has happened. They will cancel your card and send you a new one.

If you want to transfer money online, but don't have a card, try creating a Paypal account and linking it to your bank account. That will allow online purchases. You can also obtain cash from one of various mutual funds, such as Parents Plc, Sibling Co, or even Mother-in-law Ltd.



28 Dec 10, 02:35
nationwide

You're a bit out of date Nationwide have been charging for cash withdrawels abroad since 2009


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules