Holidaymakers will spend an estimated £3Bn with their credit cards abroad between now and the end of the year, and many will incur needless charges totaling millions of pounds, research from Post Office credit cards reveals.
In the Post Office survey, more than half questioned said that they will be charged to use their credit cards whilst traveling abroad. With many credit card providers charging fees of up to 2.99 per cent shoppers abroad could be unknowingly adding pounds to every purchase.
Many people are not aware of the costs involved in using their credit cards for foreign purchases, however, and do not realise that there are ways of paying for goods and services on holiday without incurring unnecessary fees.
A growing number of travellers are using prepaid currency cards instead. These cards, which are an alternative to cash, are preloaded with a foreign currency before departure and then used in the same way as a credit card, but without the additional charges, when abroad.
With a prepaid currency card your exchange rate is locked in at the time you add funds to your card – meaning you can do so now and take advantage of the strengthened Pound.
In contrast if you use such as a credit card, the exchange rate is the rate prevailing at the time of the transaction – plus invariably there are other charges such as a foreign exchange transaction fee, as the Post Office research has discovered.