CHESTER, England, June 27, 2012 /PRNewswire/ --
- 54 per cent aren't aware of immediate interest applied when using a credit card to withdraw cash abroad** from an ATM
- £10.2bn spent by Brits abroad on their plastic every year***
MoneySupermarket reveals holidaymakers using their credit card abroad are making a costly mistake and risk turning their holiday into a financial nightmare, simply by not understanding the charges involved.
According to new research** from the UK's number one comparison site, more than a half of Brits have used a credit card abroad (52 per cent), and 22 per cent have done so in the last year alone.
The research also found a high number of those who have used a credit card when in another country, weren't aware of all of the charges involved, including 57 per cent- or almost 15 million people- who didn't know there may be additional charges as well as transaction fees and interest on their card. In addition, 57 per cent didn't appreciate that when given the option to pay with a credit card in pound sterling, known as dynamic currency conversion, it can be more expensive as retailers tend to use exchange rate which favour them, rather than the consumer.
Shockingly, 54 per cent were not aware that interest is charged immediately when withdrawing cash abroad from an ATM and 49 per cent didn't realise they could be charged a transaction fee for using their card in a different country. Additionally, 41 per cent confessed they weren't aware that the transaction on a credit card abroad will be converted at the credit card company's exchange rate.
Bob Atkinson, travel expert at MoneySupermarket.com said: "Some debit and credit cards should only be used abroad in an emergency unless they are specifically designed for overseas usage. If you are planning to use cards abroad then it pays to be clued up on all the charges involved in doing so before you jet off.
"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. 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."
There are a number of market leading credit and debit cards specifically designed for overseas use abroad that are a great option for account holders and regular travellers. By applying for and using a card designed for spending overseas, consumers can benefit from consistently better exchange rates, coupled with the safety of using a pin protected card. The Sainsbury's Gold Credit Card charges no interest on ATM withdrawals if the balance is paid in full at the end of the month and there is no ATM withdrawal or foreign exchange fees, although the card does have a £5 monthly fee. Making five withdrawals of €1,500 on an average credit card with a cash advance rate of 27.9 per cent APR would cost £31.05 in interest if paid off at the end of the month, plus a foreign exchange fee of 2.99 per cent (£36.00) and a cash advance fee of 3.00 per cent (£36.12) - total cost £103.17****.
The research also found that interestingly, men were more likely to have used a card abroad in the last year (24 per cent) compared to women (19 per cent), and those aged 55 and over were more likely to have used a card abroad (25 per cent) than those aged 18-34 year old (17 per cent). London was the region where most people have used their credit abroad in the last year (32 per cent) which was 10 percentage points higher than the UK average and higher than the North East where just 12 per cent had done so.
Bob Atkinson continued: "Another thing to look out for when using your cards abroad is when retailers offer to convert the card transaction into sterling at point of sale, a practice known as dynamic currency conversion. It is best not to opt for this as retailers generally offer unfavourable rates of exchange compared to those on a credit, debit or prepaid card. Many airlines also offer this option for on board purchases. Avoid it at all costs.
"If you are planning to take out a card specifically to use abroad, plan ahead and don't leave it until the last minute as you have to allow at least ten working days to receive the card from the date of application. You can quickly and easily compare features and benefits of a range of debit cards using MoneySupermarket."
Notes to Editors
* Results have been weighted to nationally representative criteria, based on 49,969,000 UK adults. 15million= 14,702,608, or 57% of those who have used a credit card abroad not being aware of additional charges as well as the transaction fee and interest
**Opinium Research carried out an online survey of 2012 UK adults aged 18+ from 15 to 18 of June 2012
***UK Cards Association statistics on credit card spending
**** Based on €:£ exchange rate as at 26 June 2012
MoneySupermarket.com's customer commitment
- No other site compares more prices or products
- We are independent so only find the best deals for you
- The price you see is the price you pay - you don't need to go direct and you won't get a better deal doing so
- Your details are safe with us and we won't sell them to anybody
MoneySupermarket.com compares (at 29th March 2012)
- 98 car insurance providers and 81 home insurance providers
- 11 broadband providers and 18 energy providers
- 31 unsecured loan and 5 secured loan providers
- 62 mortgage lenders and 28 credit card providers
- 67 savings providers and 37 current account providers.
- Over 1,750,000 mobile phone deals
We promise to be clear and impartial
- All the products in our full search results tables are displayed in a completely unbiased manner.
- We don't add fees or commissions on to the prices we compare.
- There may be times when another site compares more companies than us on a particular product, perhaps because of market changes or technical issues. You'll be able to see this and know we are working hard to fix it.
We promise to be trustworthy
- We never use your data to make unwanted sales calls or send you spam.
- We never pass your personal information to third parties unless you give us permission to do so.
- Even if you choose to receive additional information from us, you can opt out at any time.
- We promise to be supportive.
- You can use our community forum to get information and help from other customers.
If you need further help or support, you can contact our sales advisors or customer services agents.
For further information please contact:
PR Manager Financial Services