How to avoid holiday charges

%VIRTUAL-SkimlinksPromo%If you plan on using your plastic abroad then you will have to be very careful if you want to avoid extra charges mounting up.

Customers using credit or debit cards abroad typically get charged between 2.75% and 2.99% on overseas spending with their plastic - and between 2% and 5% for withdrawing cash at overseas ATMs - with a minimum charge of £3 or £5.
In addition there are possible losses from exchange rates to contend with – paying in stores with sterling overseas is generally a bad idea – as well as the possibility of having to pay interest on any cash withdrawn, even if you pay off the bill in full when you get the monthly statement.

All these extra charges really add up so it is vital to choose the best card for your travels.

David Black of Consumer Intelligence said it's worth looking at the Capital One Classic Extra, Aqua Reward, Post Office Credit Card and Saga Platinum Credit Card, which do not levy a foreign exchange fee on overseas spending. The Halifax Clarity also doesn't charge a foreign exchange fee or levy an overseas ATM withdrawal charge - although local ATM providers may charge a fee.

He adds that debit cards to consider for overseas use include Cumberland Building Society's Plus Current Account and Norwich & Peterborough's Gold Classic Current Account - which don't charge for overseas spending or an ATM withdrawal fee - plus Metro Bank's Current Account which doesn't charge for purchases or ATM withdrawals in Europe. The Cumberland's account can only be opened by people who live in its branch area.

Black said: "Holidays can be very expensive so anything which helps keep the costs down is worth looking at and getting the best credit or debit card is a good start. It is generally a bad idea to use a credit card for cash withdrawals and particularly so overseas. Most credit cards will have pay an ATM fee and a forex fee, as well as charging interest on the amount withdrawn - even if you pay off the entire outstanding amount when you get your next credit card statement."

When it comes to cutting back fees, you have more options than you might think. People who don't want to use credit or debit cards overseas could also look at prepaid cards which only allow you to spend the money you have already loaded on to them.

Three to consider if you are going to mainland Europe or the US are Caxton FX and UK cash, which don't charge fees for purchases or ATM withdrawals; and FairFX which does not charge for spending but does charge 1.5 Euros or $2 for ATM withdrawals.


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