As the OFT calls for an investigation into currency fees, a study by travel search site Skyscanner has revealed that British holidaymakers could be paying hundreds in unnecessary ATM charges when using debit and credit cards abroad.
A recent survey found that using credit and debit cards is the most popular method of using currency abroad with one in three travellers now relying on this option. But worryingly, almost half state that they used their cards as and when needed, rather than withdrawing lump sums, and thus could be racking up per transaction debit card charges.
Skyscanner reviewed both credit and debit cards for the top UK banks and found not only was there a huge difference in the charges made between banks, but even customers banking with the same bank could be charged different amounts depending on which card type they use.
The worst offender of the cards reviewed was found to be the Halifax/BoS which saw customers using their debit cards abroad charged over £70 for an average week’s spending*, making a whopping £140 for a traditional fortnight holiday. They also charged more in fees than any other credit card, however Halifax customers opting to use the Halifax Clarity credit card are charged as little as £3 for exactly the same fortnight’s spending.
The Santander Zero debit card was the best option for savvy travellers with no fees charged at all, however Santander customers using a basic debit card would be charged over £130.
It was also found that the highest charges for average spending habits tended to be with debit card use due to the per transaction charges – the top five charges were all debit cards and each was over £100 compared to around £80 for the highest charged debit card.
Skyscanner’s money expert Carol Petrie says, “Our study shows the importance of doing your research before you go on holiday - otherwise you could be racking up some unexpected debts to greet you when you get home.
“Consumers should check how much their bank charges or look at using a card where there is no interest rate charged on purchases made abroad, no foreign exchange fee and no ATM cost. The best card is one that offers a decent exchange rate and minimal fees – The Post Office offers a very good one.
She continues, “If you do have to use a debit card be mindful of the fact you are charged every time you use it so if you can withdraw a couple of lump sums over the course of your holiday you will be far better off than using it on an ad hoc basis.”