Ask Sindie: A wall of card charges overseas

How can we avoid high fees for using our plastic abroad?


Q: My wife and I racked up over £60 in fees on a Lloyds TSB credit card last year during a break in Berlin. They were levied simply for paying in restaurants and for goods in stores and getting money from an ATM.

We're going back next month but are determined not to pay such astronomical fees.

Are there any particular cards you would recommend? Both of us have decent credit records.

HC, Manchester

A: It's estimated that Britons abroad will pick up more than £600m in charges on credit and debit cards this year, according to Apacs, the payments body.

This mountain of charges includes a currency conversion (usually 2.75 per cent) on all transactions; up to £2 at an ATM; a higher "cash advance" annual percentage rate (APR) for using a card at the cashpoint; and something called a "dynamic currency conversion".

With the latter charge, consumers are asked if they'd rather settle their bill in sterling. If they say "yes", they will pay at a local exchange rate rather than that on their lender's card - and so end up being ripped off with a higher rate.

Keeping a lid on all these charges isn't easy as nearly all lenders apply them, albeit at different levels.

Moneysupermarket.com, the price-comparison website, has just reviewed its top five credit cards for use overseas. Its preferred plastic is from Nationwide building society. This has no currency loading fee for transactions in stores or restaurants in Europe, and levies only a 1.5 per cent (minimum £1.50) fee at the ATM, with an APR of 16.9.

Alternatively, it suggests Cahoot. This has a lower cash advance APR of 11.8 but levies a 2.25 per cent currency loading fee.

To avoid charges altogether, you could open a Nationwide FlexAccount. Its debit card won't charge you for using ATMs or for buying goods in store.

However, following a recent Court of Appeal ruling, people who use a credit card abroad will now have their payments protected against faulty goods. The same rights do not apply if using a debit card overseas.

If you need help from our consumer champion, write to Sindie at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS or email sindie@independent.co.uk. We cannot return documents, give personal replies or guarantee to answer letters. We accept no legal responsibility for advice given.

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