Fri, 07 Jul 06
Nationwide Building Society estimates that holidaymakers will be charged over £535 million in foreign usage fees by their credit or debit card provider this year.
Whilst the Nationwide itself doesn't apply a so-called foreign currency loading fee when people make withdrawals/purchases abroad, other providers do.
And it could be as much as 5.25% for cash withdrawals and a minimum 2.65% for purchases, says a new report 'Avoiding Financial Pitfalls Abroad' from the bank.
Dynamic Currency Conversion
While abroad, the bank urges holidaymakers not to be caught out by Dynamic Currency Conversion - a currency conversion 'service' which can result in consumers paying extra on purchases. VISA guidelines state that a UK cardholder should have the option to pay a bill in either the currency of the country they are visiting or in pounds sterling.
Nationwide recommends its cardholders always opt to pay for purchases in the local currency of the country they are visiting. This ensures that they get the best exchange rate and no commission charges.
Research shows that 57% of holidaymakers use local currency for holiday spending. Before buying foreign currency, Nationwide recommends that holidaymakers check the exchange rate and avoid paying extra by shopping around for a commission free travel money service.
Meanwhile, in the last 12 months, 13% of travellers ventured abroad without arranging the necessary cover. If booking a holiday independently, or through a travel agent, it is important to take out adequate travel insurance and shop around for a good deal. Neglecting to do so can result in huge medical bills and financial loss should anything go wrong while away.
Stuart Bernau, Nationwide's executive director, said: "Everyone looks forward to their holidays but, amidst all the excitement, nobody wants to find themselves taking unnecessary risks or incurring unnecessary charges."
"Quite frankly, some organisations are making excessive profits out of their customers through the cost of foreign currency, travel insurance and - most of all - card use abroad. To make matters worse, some of these costs are not exactly transparent."
Back to: News Index