British holidaymakers are clueless over the reality of high credit card charges
Holidaymakers who don’t fully understand the charges involved in using a credit or debit card could risk falling into debt.
Over half (54%) of those polled recently by Money Supermarket are not aware of the immediate interest which is applied when using a credit card to withdraw cash from an ATM machine abroad.
Every year, Britons spend a staggering £10.2 billion on their credit or debit cards and the interest involved could be significant.
Some 52% of UK travellers have used their credit card abroad with 22% doing so in the last 12 months.
The research found that a staggering 57% of those who used their credit card overseas are not aware of the costs and charges involved. Some of those were even unaware that additional charges, as well as transaction fees and interest, would be charged as a result of using plastic abroad.
Another 57% of British travellers did not appreciate that when paying for pound sterling overseas on credit card, it can be more expensive as retailers use an exchange rate which favours them rather than the customer.
Worryingly, 54% of people didn’t know that interest is charged immediately when withdrawing cash abroad from an ATM machine and an additional 49% didn’t realise that you could be charged a transaction fee for using a credit card in a different country.
"It's extremely worrying that such a high number of holidaymakers are not aware of the extra fees or charges that apply when using a card for purchases or withdrawals, or that they may not be getting the best exchange rate,” Bob Atkinson, travel expert at MoneySupermarket.com, stated.
“Every major credit card, bar one, charges interest from the date of withdrawing cash at an ATM, many have loading fees for over the counter purchases, but you should always check before heading abroad. Failing to do so means you will probably face a hefty bill on the doormat on your return when, in fact, you thought you had snared a bargain."
It could be important to shop around for the best credit card deals to ensure that you get the best rate for overseas spending this summer.