Using Credit and Debit Cards Abroad
Being able to withdraw money abroad from a hole in the wall is the ultimate convenience. But there is a price to pay.
Debit cards usually attract an ATM fee and often a foreign loading fee too. Charges vary but Nat West, for instance, charges a withdrawal fee of 2.65% and a foreign loading of another 2.25% to a maximum of £4 per transaction. If you use your debit card in a shop it also charges 2.65% of the transaction value plus 75p.
So, if you made two £100 cash withdrawals and store purchases totalling £1,000 while abroad, this would result in a total of £58.80 in fees.
ATM withdrawals using a credit card are best avoided. As well as charging an ATM fee and foreign-currency loading fee, credit card providers charge a higher rate of interest for cash advances than purchases.
Also, with credit card cash withdrawals you pay interest on the amount from day one and not after the interest-free period (normally 56 or 59 days) and do not benefit from any 0% introductory offer.
Holiday-friendly cards such as those offered by Abbey and the Post Office don't charge an ATM fee or a currency conversion charge.
Dynamic currency conversion
Dynamic currency conversion is a 'service' that may be offered to tourists by retailers, restaurants, car hire companies and hotels in many popular tourist destinations. Rather than charging you in the local currency they offer to convert their bill into sterling. If you are asked, always say no, buy a cheap currency-conversion calculator instead.
Buying currency at the airport
With so many charges for taking cash out at ATMs, it can work out cheaper to bring your currency with you. Don't leave it to the last minute and buy it at the airport as rates offered by foreign exchange outlets at the airport tend not to be as competitive as those on the high street.
British travellers could save £1.3 billion each year by shopping around for the best deal on foreign currency - a typical saving of more than £35 per purchase.
Many banks and bureaux de change now offer commission-free currency exchange, but it's important not to take these deals at face value. This 'free offer' will often be subsidised by a poor exchange rate.
Buying your travel insurance
Travel agents provide a great service in selling holidays to holiday-makers but the travel insurance they offer is often more expensive than you can buy elsewhere and may not include the cover you need.
Go online and shop around. If you travel more than once a year, consider an multi-trip or annual travel insurance policy as well. This could turn out cheaper than buy several single-trip policies.
Using your mobile abroad
Receiving texts abroad is free but sending them will cost 25p per text upwards.
Making and receiving calls can be extortionate sometime £1 a minute or more depending where you are in the world. If you like to chat, consider buying a local or worldwide SIM card to put in your handset. Go Sim offers SIM cards that can be used around the world and mean it is free to receive calls abroad and cheaper to make them and send texts. Or, you can buy a local SIM card for the country you visit and pay local rates for local calls.
According to travelsupermarket.com, if you just turn up at Heathrow Airport unannounced it can cost up to £45 per day to park your car. Charges at other airports including Gatwick, Manchester, Luton and Stansted are also sky-high if you don't book in advance.
Booking your car-parking ahead and shopping around can significantly reduce what you pay.
Alternatively, think about using public transport.
ID theft and card fraud
Identity theft isn't just a problem in the UK - when you're on holiday and your guard is down, the risk is arguably greater.
Card fraud abroad increased by 16% between 2005 and 2006. Fraudsters, thwarted by the introduction of chip and PIN in UK shops and ATMs, targeted countries that have not yet upgraded to the more secure technology. So, while overseas, be careful not to let your card out of sight.
Also, be wary if restaurant staff take your card away from the table to swipe it - they could be cloning it.
When committing identity theft, fraudsters look for national insurance numbers, driving licenses, bank cards, birth certificates and passports. So keep your documents in the hotel safe or in a hidden moneybelt.
Wherever in the world you travel there are likely to be a variety of confidence tricksters eager to relieve you of your cash. The Lonely Planet's Bluelist (2006/07) warns of a number of dodgy scams.
- The Spanish flower scam: A kind-looking lady or child offers you flowers. As you search for coins to give them, your pockets are mysteriously emptied.
- The American three-card trick: A common scam to watch out for if you're on a trip to New York. You watch three cards get shuffled around face down and all you have to do is pick out the Queen of Spades. The odds look good at one-in-three so you think it's worth gambling a few dollars - a very easy way to lose your money.
- The Thai gem scam: Be wary of friendly tuk-tuk or taxi drivers who take you to jewellery stores with tales of how much money can be made by selling on Thai gems when you return home. You won't make a penny.
- The Egyptian both-ways scam: A taxi driver offers to pick you up from your destination a few hours later, but on the return to your hotel you find the price has shot up. The reason why? You've have been charged for the taxi driver to wait for you.
Car hire at the airport
Charges can be quoted in daily rates in local currency, and it's tricky to work out on the spot what's useful, what's a rip-off and what you need in collision damage and excess waivers.
Price-comparison websites and booking in advance is the easiest way to find the best deals. Prices vary considerably - if you want to hire a medium-sized car from Malaga airport in Spain for two weeks it can cost anything from £162 with Argus Car Hire to £391 with Avis.
You may also like to consider spending the night before you travel at an airport hotel. Some offer accommodation and car parking for the duration of your trip and transfers to and from the airport.
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