Research has shown that holidaymakers from the UK are set to mount up huge charges on their credit cards when they are abroad this year. It looks likely that they will be hit with up to £53 million in charges alone. This is because they only take with them about half of the money they will need in local currency or travellers cheques. Consequently, they end up using their credit card to withdraw cash.
We spend, on average, £784 on holiday but only take about half of this with us. Then we use our credit cards to withdraw small amounts of money at a time, not always realising how much this is costing us. It can cost as much as £2.99 to withdraw £100 when abroad.
The best way to avoid these astronomical charges is to plan ahead for your holiday spending. A lot of people do like the convenience of using their cards and if that is the case then check before you go how much it will cost you. If your card supplier is one of those with large fees then shop around and see what other deals you can get. Some suppliers have no fees at all for usage abroad.
There are other alternatives as well. You can use travellers cheques although they are not very convenient, or you can get a pre-paid currency card. This card lets you top up with foreign currency and is used like a normal credit card when abroad. Some of these have no fees as well.
One good thing at the moment is the strength of the pound against other countries. Eighty percent of foreign currencies are weaker than the pound compared to last year, according to research from Post Office Travel Money. So keep an eye on the exchange rate for your destination as well.