Tonight:
8°c
Credit firms charge British tourists £50 to take out €1,000
Sri Carmichael, Consumer Affairs Reporter10.09.09
British holidaymakers were charged a total of £106million for taking out money with their credit card abroad last month.
The biggest lenders, including American Express, Alliance and Leicester, Virgin Money, Halifax, Lloyds TSB and Bank of Scotland, are charging credit customers more than £50 to withdraw €1,000 - £879.61 at current exchange prices - from foreign cash machines, according to advertised rates.
The figures mean holidaymakers are charged nearly six per cent.
On taking out €1,000, Lloyds TSB and Halifax credit card customers pay 2.95 per cent commission - £25.95 - and a three per cent withdrawal fee - £26.39 - meaning their money costs £931.95.
Some lenders, including Halifax, also add daily interest to borrowers' bills for using cash machines, so the total they owe grows while they are away.
Even debit cards, including those from Alliance and Leicester, Smile and Co-op, can cost users more than £40 to withdraw €1,000.
Holidaymakers trying to save cash are increasingly buying money before they travel or loading pre-paid currency cards, which offer better exchange rates and lower or no usage charges.
The drive for a good deal has become even more important as exchange rates are poor and the pound buys fewer euros.
No1 Currency, which calculated the £106million figure using industry figures on credit card usage patterns, exchanges £903.34 for €1,000. Its sales grew 20 per cent in the last year.
Sales of the Travelex Cash Passport currency card in Britain have increased tenfold in the last year. It exchanges £904.15 for €1,000 and there are no usage fees.
Another popular currency card, from FairFX, sells €1,000 for £888 and has four times as many users as at the start of the year. It charges €1.50 for every withdrawal abroad.
The Santander Zero Credit Card MasterCard is the only credit card which does not charge transaction or withdrawal fees abroad.
Ricky Bruce, a financial research specialist at Moneyfacts Group, said: "It's hard to justify the charges that British travellers face on their credit cards.
"Not only are they usually charged a fee, they are also likely to have to pay for withdrawing from an ATM.
"It is clear that most companies are operating at a significant margin."
Reader views (5)
Credit card companies are nothing short of modern day bandits. Where is Robin Hood when you want him.
- Mr S.Port, London
Erm, you get stuffed with charges if you withdraw cash on a credit card in the UK, let alone if you withdraw cash on a credit card overseas. Not only do you get up front charges, but the withdrawl is charged at a higher rate of interest, and most card providers will allocate your repayments towards purchases first, before using payments to pay off cash withdrawals. I thought it was common knowledge that withdrawing cash on a credit card was a big NO?
Debit card fees are much lower - but still vary a lot. Nationwide are by far the best - they will let you withdraw cash in Europe with 0% commission and 0% fees.
- Mark Lee, Vauxhall
actually santander zero credit card charges if you withdraw cash, perhaps not a commission fee but it charges a withdrawal fee of approx 26 pct per month tho it is commission free if used to make a purchase, i found to my cost despite its misleading advertising. so be warned!
- P Chin, london
Depending on the country you're in you can opt to take the commission and exchange rate of the bank you're withdrawing from, which is often a lot better than the UK banks.
- Bob, Cheam
It definately makes sense to take cash. I've stopped using my card abroad when I realised how much it was actually costing me. Need to still shop about for cash though as some places are much better than others.
K
- Karen, London
