Bank Fees On Debit Cards

DON’T GET BURNT ON HOLIDAY SPENDING; How we’re wasting PS500m on card fees and charges.

Byline: ANDREW HAGGER money@mirror.co.uk

BRITS are paying way over the odds for their travel money by more
than PS500 million each year,
according to

prep.
1. As stated or indicated by; on the authority of:

2. In keeping with:

3.
 research by Mirror Money.

With the school summer holidays fast approaching, millions will be
planning their family
fortnight
  
n.
A period of 14 days; two weeks.


[Middle English fourtenight, alteration of fourtene night, fourteen nights : Old English f
 in the sun.

It’s already been bad news for UK holidaymakers this year as
the exchange rate for euros and US dollars is well down on those offered
in 2012.

That makes it even more important that travellers don’t get
ripped off by poor deals on plastic and foreign currency.

A family on a two-week trip abroad could easily save up to PS50 on
travel spending just by understanding the options available to them.
Research by uSwitch.com says credit card charges alone will set
consumers back PS327million this summer.

Many travellers do not know where to go for the cheapest money
deals.

The mind-boggling array of cards and different charges is a
minefield and often means people end up spending too much of their
holiday budget on card fees.

Sadly, it’s not until people get home and read their bank
statement they realise just how much they’ve wasted on charges.

We’ve been doing some digging to help you find the best
options when it comes to choosing a card and buying your holiday cash.
We also highlight the most expensive – so you know which ones to avoid.

CREDIT CARDS

If you use a credit card overseas be aware that most banks will add
on a foreign usage fee to cash and purchase transactions. In most cases
these charges are around 2.75% to 2.99% of the amount spent, however a
few cards offer a better deal (see table, opposite).

If you only use your card for making purchases in shops and
restaurants that’s all you’ll pay on top, but for cash
transactions on a credit card it’s even more expensive.

In addition to the foreign usage fee, most credit card cash
transactions will cost you an extra 3% on top, so an ATM withdrawal of
PS100 worth of euros or dollars can easily set you back a combined
charge of around PS6, so best avoided unless it’s an emergency.

Good Value – Halifax (Clarity), Metro Bank, Post Office & Saga

Expensive – American Express,
ASDA

 and
HSBC

HSBC Humane Society of Bay County  
 

DEBIT

 CARDS:

A secure and convenient way to pay on your
hols
  
pl.n. Chiefly British
Days spent on vacation.


[Short for holidays, pl. of holiday.
 but the overseas
fees and charges vary greatly from card to card. Check our table to see
how your bank stacks up. We use our debit cards more and more and tend
to take them for granted, especially when they don’t cost anything
to use in the UK.

But it’s a different picture abroad, something holidaymakers
often don’t realise until the charges hit.

As with credit cards, there is a usage fee for
debit card
 card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser’s checking account. They can also be used at automated teller machines for withdrawing cash from the user’s checking account.
 purchases
and cash withdrawals (2.75% to 2.99%) plus an ATM withdrawal charge
typically between PS1.50 and PS2.

The charge that catches most people out is the debit card
transaction fee where, as well as the 2.75% or 2.99% usage fee, some
banks hit you with an extra PS1 to PS1.50 per transaction, regardless of
the amount.

Good Value – Metro Bank, Coventry BS, Nationwide BS, Norwich &
Peterborough BS.

Expensive – Halifax, Santander, NatWest/RBS and
Lloyds TSB

.

PREPAID
  
tr.v. pre·paid, pre·pay·ing, pre·pays
To pay or pay for beforehand.


pre·payment n.
 CURRENCY CARDS:

Often a cheaper alternative is a prepaid currency card, which you
load up before you go. It’s totally separate from your bank
account.

They are chip and PIN secure, accepted wherever you see the
Master-Card symbol and offer a cheaper way to pay than many debit and
credit cards.

Good value – FairFX Anywhere and Travelex Cash Passport Globe.

Expensive – Post Office Travel Money Plus.

There are two types of prepaid currency card. With a sterling
prepaid card you transfer money on to the card in pounds. You use the
card to make purchases or withdraw cash and the exchange rate at the
time of each purchase or transaction is used to convert the money from
your card. The fees for cash and purchases tend to be cheaper compared
with credit and debit cards, as you’ll see from the table.

With a single-currency prepaid card you can choose euros or US
dollars (other currencies including
New Zealand dollar

,
Canadian dollar

 and South African rand are available from Travelex).

You transfer your holiday money to the card and it is converted
using the exchange rate on offer that day.

You then don’t have to worry about the exchange rate as you
already have your euros or dollars locked in.

BE PREPARED

Before you take off, check your current account balance and your
credit card balance and limit.

Check your credit and debit card won’t pass their
expiry date
 expire n → ;
(on label) →

 expire n →  
 while you’re away.

Tell bank and credit card company you’re away or they may
think transactions are
fraudulent

 and may stop your cards.

Take a spare credit card with you as a backup, and keep it in the
hotel safe.

Take your travel insurance details.

Keep a photocopy of of cards, passport and travellers cheques to
help replace any lost or stolen ones.

TOP TIP!

BEWARE
  
v. be·wared, be·war·ing, be·wares

v.tr.
To be on guard against; be cautious of:  

v.
 of an increasingly common practice where a retailer or ATM
lets you pay in sterling, known as
Dynamic Currency Conversion

 (
DCC

).

While it may seem a good idea that you know exactly how much
you’ll be debited in sterling, the disadvantage is that it gives
them the chance to use a poor exchange rate which could see you paying
way over the odds, in some cases by 4%.

Even though most card issuers charge a 2.75% to 2.99% loading fee,
paying in the local currency is nearly always the best option.

HOW CARD CHARGES COMPARE WHEN YOU USE THEM ABROAD

WHICHEVER card you take abroad, it’s worth spending a couple
of minutes to check what the charges are for your particular plastic.

At least if you understand the costs, you can adapt your spending
pattern accordingly – for example, you don’t want to be making lots
of small cash withdrawals or purchases of PS10 or PS20 if you’re
going to be hit with charges of PS1.50 each time. While these costs
don’t sound much in isolation, if you look at a typical holiday
scenario below, you see the charges soon add up.

Hidden costs of typical family holiday spending

Two-week family holiday where 4 x PS150 (currency equivalent) ATM
withdrawals are made. Total PS600.

Plus 26 purchase transactions (supermarket, gifts, restaurant,
excursions, etc). Total PS1,380 Total holiday spend = PS1,980

How much will your card provider charge you?

PROVIDER CARD TYPE COST

Halifax Debit PS99.45

NatWest Debit PS98.95

Santander Debit PS95.95

Lloyds TSB Debit PS94.20

MBNA
 
 Credit PS89.20

Capital One Credit PS72.45

HSBC Debit PS66.45

Barclays Debit PS59.20

Barclaycard Credit PS59.20

Travelex Cash

passport Globe Currency PS49.30

Nationwide BS Debit PS43.60

FairFX – anywhere Currency PS31.72

Post Office Credit PS15.00

SAGA Credit PS12.00

Norwich &

Peterborough BS Debit Free

Metro Bank Debit Free

Halifax (Clarity) Credit Free

Metro Bank Credit Free

How much credit card providers charge for foreign transactions

PROVIDER FOREIGN USAGE CASH CHARGE ATM WITHDRAWAL FEE

American Express 2.99% 3% min PS3

Asda 2.99% 3% min PS5

Barclaycard 2.99% Free

Halifax Clarity Credit Card Free Free

HSBC 2.99% 2.99% min PS3

Lloyds TSB 2.95% 3% min PS3

Metro Bank** Free Free

MBNA 2.99% 5% min PS5

Nationwide Building Society 2.00% 2.5% min PS3

NatWest/RBS 2.75% 3% min PS3

Post Office Free 2.5% min PS3

Saga Free 2% min PS2

** Metro Bank Current Account required

WHERE TO GET THE BEST DEAL ON FOREIGN CURRENCY

NEVER buy or exchange back your currency at the airport unless
it’s an absolute emergency, because you’ll end up paying well
over the odds either via a poor exchange rate, high commission charges
or a combination of both. You can order currency online and arrange for
it to be delivered to your home – plus many providers don’t charge
if you order PS500 or more worth of currency.

Best deals for currency – cost of having 1,000 US dollars delivered

PROVIDER RATE COST DELIVERY

Moneycorp 1.491 PS670.74 PS5.00 up to PS500 – no charge for orders
over PS500

Travelex 1.489 PS671.59 PS3.95 up to PS300, PS1.95 PS301 to PS500 –
over PS500 free

American Express 1.488 PS671.86 PS5.00 up to PS500 – no charge for
orders over PS500

ICE 1.487 PS672.45 PS3.95 up to PS500 – no charge for orders over
PS500

FairFX 1.496 PS674.40 PS6.00 up to PS750 – no charge for orders
over PS750

Best deals for currency – cost of having 500 Euros delivered

PROVIDER RATE COST DELIVERY

HSBC 1.154 PS433.16 PS3.95 up to PS250 – no charge for larger
amounts

Travelex 1.155 PS434.89 PS3.95 up to PS300, PS1.95 PS301 to PS500 –
over PS500 free

ICE 1.156 PS436.66 PS3.95 up to PS500 – no charge for orders over
PS500

Post Office (online) 1.145 PS436.68 Free for orders over PS400

FairFX 1.160 PS436.89 PS6.00 up to PS750 – no charge for orders
over PS750

??Source: all tables Moneycomms.co.uk

Debit card and pre-paid card providers’ charges for foreign
transactions

PROVIDER

CASH

FOREIGN USAGE CHARGE

CASH

ATM CHARGE

PURCHASE

FOREIGN USAGE CHARGE

PURCHASE

TRANSACTION CHARGE

Barclays 2.99% Nil 2.99% Nil

Coventry BS 2% Nil 2% Nil

First Direct 2.75% 2% min PS1.75 max PS5 2.75% Nil

Halifax 2.75% PS1.50 2.75% PS1.50

HSBC 2.75% 2% min PS1.75 max PS5 2.75% Nil

Lloyds TSB 2.99% 1.5% min PS2 max PS4.50 2.99% PS1.00

Metro Bank Free Free Free Free

Nationwide BS 2% PS1 2% Nil

NatWest/RBS 2.75% 2% min PS2 max PS5 2.75% PS1.25

Norwich &

Peterborough BS Free Free Free Free

Santander 2.75% 1.5% min PS1.99 2.75% PS1.25

Co-operative Bank 2.75% 2% min PS2 2.75% Nil

PREPAID CURRENCY CARDS

FairFX – anywhere 1.40% PS1 1.40% Nil

Travelex – cash

passport globe 2.49% Nil 2.49% Nil

ICE -Sterling 1.85% Nil 1.85% Nil

Post Office Travel

Money card 3.00% PS1.50 3.00% Nil