Hammer your plastic abroad and you"ll be sorry when you get home

Britons racked up an astonishing £122million in unnecessary credit card charges last year by using their plastic while abroad. Many of them would have been oblivious to the fees charged by banks for withdrawing cash and paying for goods and services in a foreign currency.

Michelle Slade, an analyst at the financial website Moneyfacts.co.uk said: In the UK we are so used to 'free banking' that many people assume things will be the same when they go abroad.

"This can be a costly mistake as additional charges may well apply; both for taking money out of a cash machine and for making purchases in store."

Banks charges for withdrawing cash from machines abroad typically range from £1.50 to £5 a pop and holidaymakers who use their cards to pay in a foreign currency will have to pay about 2 - 3 per cent extra for the banks to convert the currency to sterling.

Nationwide, which was one of the few banks not to charge customers a premium for using their cards abroad, has recently announced that it is replacing its Flex Card with a new card that can't be used to withdraw cash from foreign ATMs.

To avoid excessive bank charges when travelling overseas, holidaymakers are best advised to change their cash for foreign currency or travellers cheques before leaving home or to buy a pre-paid currency card.

There are several pre-paid currency cards on the market, one of which is the Caxton FX pre-paid MasterCard. These can be loaded with euros, sterling or dollars in advance and used like charge cards.

Digg    Reddit    Facebook    Tweet This