19 Apr 2024

Beware of foreign usage charges this Winter

As winter draws nearer, many people will be considering booking a holiday to sunnier climates.

While using your credit or debit card may be the easiest way to pay for things while your away, costs can soon mount up.

Michelle Slade, analyst at Moneyfacts.co.uk, comments:

Credit cards

“Most credit cards charge a foreign usage charge, some as much as 2.99% for both purchases and cash transactions. Charge are applied each time the card is used and can soon add up.

Company	Foreign Usage Charge EU	Foreign Usage Charge Worldwide
American Express	2.99%	2.99%
Bank of Scotland	2.95%	2.95%
Barclaycard	2.75%	2.75%
Capital One Bank	2.75%	2.75%
Egg	2.95%	2.95%
Halifax	2.95%	2.95%
HSBC	2.99%	2.99%
Lloyds TSB	2.95%	2.95%
MBNA Europe Bank	2.99%	2.99%
MINT	2.75%	2.75%
Nationwide BS	Nil	1.00%
Natwest	2.75%	2.75%
Post Office	Nil	Nil
Royal Bank of Scotland	2.75%	2.75%
SAGA	Nil	1.00%
Santander	2.95%	2.95%
The Co-operative Bank	2.75%	2.75%
Thomas Cook Personal Finance	2.50%	2.50%
Yorkshire Bank	2.95%	2.95%
Source: Moneyfacts.co.uk – 16.11.09

“Taking cash out on your credit card is never advisable even in the UK. Not only is the interest rate much higher than on purchases but you will be charged interest from day one.

“On top of this, you will be charged a cash handling fee as well as a foreign usage charge if the cash is taken out abroad. £100 cash taken out on an American Express, HSBC or MBNA credit card will see you paying £5.99 in charges.

“Changes made earlier this year mean that both Nationwide BS and Thomas Cook Personal Finance now both charge for using your card abroad, having previously not done so. However, Nationwide BS makes no charge in the EU and has one of the lowest charges for worldwide use.”

“If customers are going to make a lot of card payments abroad, it may be worth taking out a card with the Post Office, which remains the only card provider making no additional charge for foreign usage.

Debit cards

“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.

Company	Cash Conversion Charge	Cash Transaction Charge	Retail Conversion Charge	Retail Transaction Charge
Abbey	2.75%	1.5%, min £1.99	2.75%	£1.25
Alliance & Leicester	2.95%	2%, min £2.00	2.95%	Nil
Barclays Bank	2.75%	2%, min £1.50, max £4.50	2.75%	Nil
Coventry BS	Nil	2.00%	Nil	2.00%
Halifax	2.75%	£1.50	2.75%	£1.50
HSBC	2.75%	Nil	2.75%	Nil
Lloyds TSB	2.99%	1.5%, min £2.00, max £4.50 (Nil on Premier account)	2.99%	£1.00 (Nil on Premier account)
Nationwide BS	Nil	1.0%	Nil	1.0%
Natwest	2.75%	2%, min £2.00, max £5.00	2.75%	£1.25
Royal Bank of Scotland	2.75%	2%, min £2.00, max £5.00	2.75%	£1.25
The Co-operative Bank	2%, min £2.00	2.75%	Nil	2.75%
Yorkshire Bank	Nil	3.75%, min £1.50	Nil	2.75%, min £1.50
Source: Moneyfacts.co.uk – 16.11.09

“Again these charges are levied each time the card is used overseas. For every £100 taken out on an Alliance & Leicester card, you will be charged £4.95.

“Customers taking out cash need to be aware of the minimum charge. If you withdraw lots of small amounts you will be hardest hit. It may be worth planning ahead for your financial requirements a few days at a time.

“Even paying for goods directly with your debit card does not stop you being charged. Most providers charge a retail conversion charge and some charge an additional transaction charge. Spending £100 on your Halifax debit card will see you being charged an additional £4.25.

“While the Nationwide BS no longer offers free transactions abroad, it does offer the cheapest option by far if you use your debit card while on holiday.

“With everyone concentrating on enjoying themselves rather than on what they are spending, overseas charges can soon mount up. When customers get home they could find a nasty surprise when their monthly statements arrive.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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