Lisa Taylor from moneyfacts.co.uk comments on the options
available to travellers when spending overseas and the costs that consumers
should be but are sometimes not aware of.
“Whether planning a summer holiday or jetting off for
Easter, consumers are keen to check the costs when it comes to choosing the
hotel, flights, insurance, and airport parking, but tend not to use the same
level of consideration when choosing the cheapest option when it comes to their
spending money.
“With each provider charging varying fees which are not
immediately visible and often not fully appreciated by the consumer, it is a
potential minefield to find the ‘best’ deal, and this becomes much worse as we
consider the outside influence of exchange rates.
“Consumers have three main options, the traditional
travellers’ cheques and currency, debit cards or credit cards. Amex has also
launched into the prepay card arena, with a card designed for overseas travel,
but the rest of the industry is yet to catch on.
“Traditional cheques and currency are still popular with
many travellers and offer a competitive market place for providers. Commission
free deals are becoming easier to find particularly for currency and currency
travellers’ cheques, where there is still scope for profit by means of
discounted exchange rates.
“Unfortunately, without plenty of leg work by the consumer,
it proves a difficult market in which to compare deals. Providers offer varying
commission deals, but without taking into consideration the exchange rate it is
impossible to decipher the ‘best’ overall deal.
Moneyfacts complies a full list of providers detailing
charges, offers and delivery details, which can be found at
www.moneyfacts.co.uk
“The competitive nature of the market reinforces the message
that there is profit to be made, even when offering 0% commission. Large
institutions such as NatWest and HSBC are offering free prize draws as an means
to entice customers to buy their holiday from them.
“After finding their chosen provider, in many cases the
consumer has a much more flexible choice, than was previously available, with
the ability to order online, on the telephone and the option of home or branch
delivery. But do beware; these do sometimes come at a cost.
“Credit cards are becoming an increasingly popular method of
payments and withdrawing cash abroad. Many of us do not realise that, when
using a credit card abroad, the card issuer adds on a foreign usage loading;
this can be as high as 2.75%. That means a consumer spending £1,000 abroad
would be charged £27.50.
“There are however a few exceptions to this rule within the
market, including Nationwide and Saga who do not charge for usage anywhere in
the world.
“In addition, if withdrawing cash overseas, consumers will
also be charged a cash withdrawal fee, which can be as high as 2.5%. So,
withdrawing £1,000 cash could cost you as much as £52.50.
“Debit cards also come attached with foreign loadings up to
2.75%, cash withdrawal fees and in some cases an additional per item charge for
purchases, tucked away in the small print, giving customers a nasty surprise
when the statement hits their door mat. Any consumer looking to rely solely on
a debit card would be well advised to consider Nationwide, the only provider
not to impose cash or purchase fees.”
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