British holidaymakers are likely to withdraw over £7 billion from foreign cash machines this year, but doing so could cost them as much as £284 million in fees, according to MoneyExpert.com*.
Research from the independent financial comparison website shows that the cost of withdrawing cash abroad can vary dramatically between providers and it is urging holidaymakers to check their provider’s charges before they travel.
The average cash withdrawal abroad is equivalent to £103, but according to MoneyExpert.com the amount withdrawn that will show on a statement is likely to be around £107.
Debit card holders will pay on average an additional £4.12 in charges, and credit card holders £4.33. Although debit cards are a cheaper method of withdrawing cash abroad than credit cards, some current accounts still charge more than the cheapest credit cards.
The average debit card withdrawal incurs charges of around 4% which is broken down into a commission fee and a handling fee. The average credit card withdrawal costs around 4.2% with higher handling fees the major difference. The cheapest cards charge no commission fees or have low handling fees.
Nationwide offers customers a good option on both fronts as its FlexAccount current account does not charge for withdrawing cash abroad, and holders of its Gold credit card do not have to pay a commission fee. The Zero Card from Abbey also rates highly charging no fees for cash withdrawals and no foreign exchange fees.
Sean Gardner of MoneyExpert.com, said: "Withdrawing cash from an ATM or over the counter whilst abroad can be the most convenient way of getting hold of your money. It’s also safe and simple."
"However, most people will have to pay for the privilege and some will pay considerably more than others. With the pound currently very weak against the Euro, unnecessary fees are the last thing holidaymakers need."
British people abroad will make around 68.93 million cash withdrawals this year, taking out up to £7.1 billion in spending money. In total card transactions are likely to account for around 50% of all foreign spending with those transactions totalling over £25 billion.
Sean Gardner added: "Many people are likely to be unaware of the charges they can incur for withdrawing cash abroad. If money is tight this year we highly recommend that travellers do some research and find the best deal available."
"Even if you have a credit card offering zero per cent on cash withdrawals it’s important to clear the balance as soon as possible on your return as the APRs charged on those transactions can be very high indeed."
* Research and analysis by MoneyExpert.com. Calculations based on data from 10 major providers of both credit and debit cards and data provided by the Association for Payment Clearing Services (APACS)