Sneaky fees when using cards abroad will cost British holidaymakers millions this summer
British holidaymakers will be stung by tens of millions of pounds worth of complex charges by using their credit cards abroad this summer - with those using debit cards being hit even harder.
A quarter of adults leaving British shores this summer told a uSwitch.com survey that they will be using their credit card for purchases, with the same amount saying they will use their debit card.
But many will be unaware they will get hit with extra fees for doing so, with uSwitch finding a typical exchange rate fee of 2.75 per cent on each credit card transaction, while those using debit cards will pay an extra £1.25 purchase fee on top of that.
Limit your spending: Using credit cards for purchases and debit cards for withdrawals can limit the extra charges you will incur.
Michael Ossei, of uSwitch, said: 'Travelling abroad is expensive enough without the extra penalties for using the wrong card while you're there.
'Financial awareness may go into holiday mode, but a high credit card bill is one holiday hangover you can do without.'
Holidaymakers preparing for their summer holidays should remember one crucial rule if they intend to use their cards abroad: use your credit card for purchases, and debit cards for withdrawals.
Using your credit card to withdraw cash can result in fees of up to 3 per cent on top of the 2.75 per cent being charged on the transaction fee. What's more, interest immediately starts to accumulate at rates of up to 39.9 per cent.
Using your debt card to withdraw meanwhile will have a smaller typical withdrawal fee of 2 per cent, on top of the 2.75 per cent transaction fee, and comes with no cash advance interest charges.
For those who want to cut down their costs even further, there are a handful of credit cards and current accounts which are perfect for spending abroad as they will not charge you transactions.
This is Money's guide to overseas spending currently recommends Metro Bank or Norwich & Peterborough current accounts for debit spending abroad, while the Halifax Clarity Card or Nationwide Select card is recommended for those spending on credit.
USwitch also suggests the Post Office Platinum Mastercard or the Aqua Advance Credit Card, though the latter comes with a higher typical APR of 34.90 per cent.
Credit card charges: This uSwitch.com table shows how much credit card customers will be charged for purchases and withdrawals made overseas.
Mr Ossei added: 'Too often we rely on the convenience of plastic without thinking about the extra fees that may apply, but with some planning ahead it’s possible to escape the hefty charges.
'If you prefer to pay with cash, make sure you take both exchange rates and commission rates into account to get the best rate on your money.
'This will normally involve pre-ordering your currency and
collecting it before you travel. Avoid changing currency at the airport
or straight from your debit card, as commission fees could cost you
those well-earned poolside drinks.'
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