The 244 million pound cost of holiday convenience

  • Debit card withdrawals overseas cost average £3.67 a time, MoneyExpert.com research shows.

Holidaymakers abroad will withdraw up to £6.4 billion this year from ATM machines on their debit cards – but it could be costing them over £244 million to do so, new research from MoneyExpert.com shows.

The independent financial comparison website says the cost of withdrawing cash abroad varies dramatically and is urging travellers to check their bank’s charges before they visit a foreign ATM. Consumers are usually urged to use debit cards overseas as they are more secure and convenient than carrying wads of cash or travellers’ cheques. But the convenience comes at a cost.

In total we put £6.6bn on our cards abroad last year, the vast majority of which, £6.4 billion goes on debit cards*. The average cash withdrawal abroad is equivalent to approximately £96**, but according to MoneyExpert.com, the amount withdrawn that will show on a statement is likely to be around £99.07.

Debit card holders will pay on average an additional £3.67 in charges.
The average debit card withdrawal incurs charges of around 3.5 per cent, which in most cases is broken down into a commission fee of between 2.65-2.75% and handling fee of between £1.50 and £2.

Nationwide offers the best debit card deal amongst the major banks as its current account holders are not charged for withdrawing cash abroad. If Nationwide is removed from the analysis the average charge jumps to £4.08.

Withdrawals with an Alliance and Leicester debit card on the other hand will charge you 1.5% of your withdrawal and a minimum fee of £1.50 in addition to a Sterling conversion fee of 2.75%, while NatWest will charge you the same 2.75% conversion fee plus a 2% charge which has a minimum fee of £2, and a maximum £5.

Sean Gardner, Chief Executive of MoneyExpert.com, said: "With the pound strong against many major currencies you’re likely to get a favourable deal wherever you go, but by using foreign ATMs your money will lose some of its value.

"There’s a price to be paid for convenience of using your plastic overseas. The old-fashioned ways of changing your currency or taking travellers’ cheques should not necessarily be dismissed. People need to think carefully about whether they are prepared to pay the 2.75% commission plus fee, before entering their PINs."

Compare current accounts

Notes
* Calculation based on data provided by the Association for Payment Clearing Services (APACS), information on overall spending on credit and debit cards
** APACS calculation

Leave a Reply

Your email address will not be published. Required fields are marked *