Using a typical credit or debit card to withdraw cash on an overseas break could mean paying costly and unnecessary fees. But shop around before you go and you could avoid paying over the odds.
The financial firm Moneyfacts say a holidaymaker taking out £250 from an overseas ATM will typically face charges of £11.88. The same withdrawal on a credit card would typically attract £14.95 in fees, before interest.
Using the cards in shops and restaurants can also be costly, it says, with a £50 spend on a debit card attracting £1.38 in fees, and the same purchase on a credit card costing £1.50. The figures are based on HSBC accounts.
“Those well overdue a holiday may be paying more for their trip and the rising cost of living could also be denting their spending money,” says Rachel Springall, a finance expert at Moneyfacts.co.uk.
“Holidaymakers may then be looking to make their cash go further, and avoiding a typical debit or credit card for spending abroad is a good way to avoid wasting cash on unnecessary fees.”
The fees to look out for are transaction, conversion and withdrawal fees, which are often 2% or more of the money being spent or withdrawn. Many banks also have a minimum, which means costs can be relatively higher on small purchases and withdrawals.
Moneyfacts says there are debit and credit cards available that do not attract fees. For debit cards, that means opening a current account with the provider, which could mean committing to paying in a certain sum each month.
Starling Bank, Metro Bank and Virgin Money all offer fee-free current accounts which do not charge in Europe for using a debit card. Metro Bank and Virgin Money have transaction fees on card use in countries further afield.
Credit cards without transaction
Read more on theguardian.com