Money Insider: Pack the right plastic for your Easter break
Saturday 23 February 2013
With many consumers gearing up for the Easter break, it's a good time for a reminder of the charges you can incur when using your debit and credit cards abroad.
Cards may offer a secure and convenient way to pay when you're away from the UK, but the fees and charges can vary widely, so it's worth getting to grips with these before you head off.
Most providers will add on a foreign usage fee to all credit card cash and purchase transactions – in most cases around 2.75-2.99 per cent, but there are better alternatives.
Credit cards from Halifax (Clarity), Metro Bank, Saga and the Post Office don't charge any usage fee, immediately saving you up to £3 for every £100 of purchases.
But that's only half the story, as on top of the usage fee, most credit card cash withdrawals will cost you another 3 per cent, so an ATM withdrawal of £100 currency equivalent can easily cost you £6, and thus is best avoided except in an emergency.
We tend to take our debit cards for granted, particularly as they don't cost anything to use within the UK. Unfortunately it's not the same when you're overseas and it's something that holidaymakers sometimes overlook, until its too late and the charges have been debited from their account. As with credit cards there is a usage fee for cash withdrawals (2.75-2.99 per cent) plus an ATM withdrawal charge, typically between £1.50 and £5.
However, the card charges that catch most people out are those levied for debit card purchases, which are subject to the usage fee above, plus up to an additional £1.50 per transaction, regardless of the amount. The worst offenders are Halifax (£1.50 per purchase transaction), NatWest, RBS and Santander (all £1.25).
If you're looking for a fee-free debit card to use overseas, take a look at the cards from Norwich & Peterborough Building Society or Metro Bank.
It's worth spending a couple of minutes to check with your bank what the charges are for your particular plastic before you set off, rather than getting a nasty shock when you check your account on your return.
At least if you understand the overseas charges, you can adapt your spending patterns accordingly – for example, you don't want to be making cash withdrawals or purchases of only £10 or £20 if you're going to be hit with charges of £1.50-plus each time.
Another option to consider is a prepaid currency card from the likes of Fair FX, MyTravel Cash or Travelex. The cards are chip and PIN secure, accepted wherever you see the MasterCard symbol and offer a cheaper way to pay than many debit and credit cards.
The sterling currency cards can be loaded from your debit card and as such the exchange rate is locked in at the time the cash is transferred, so you'll know exactly what you'll be paying for all your holiday transactions.
A final warning: beware of an increasingly common custom (particularly in Europe) where the foreign retailer or ATM gives you the option to pay in pounds, known as dynamic currency conversion (DCC).
Although you know exactly how much in pounds you'll be debited, the downside is that it gives the retailer the opportunity to use an uncompetitive exchange rate, which could cost you an extra 3 or 4 per cent – avoid!
Co-operative Bank's best-buy bonds hint at what could be…
It's been a dire few years for savers, who have suffered a combination of low interest rates and high inflation, so it's refreshing to be able to report a glimmer of good news in this area.
Co-operative Bank has just launched some market-leading fixed-rate savings bonds. The one-year fixed savings bond pays 2.31 per cent AER and for three years the rate is 3 per cent AER, both products currently topping their respective best buy tables.
There's a two-year option too, at 2.5 per cent – still a good rate, but bettered by Virgin Money at 2.65 per cent with its E-Bond (Issue 26).
The big question is, is this a merely false dawn, or has the savings market bottomed out and this is the first in a series of moves that will see rates gradually pick up again?
Time will tell, and while I hope it's the latter, I fear it's going to be a long haul before we see rates anywhere near the levels they were at last autumn, before the market was decimated by the Funding for Lending scheme.
Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Al Pacino on suffering from depression: 'It can last and it's terrifying'
- 2 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 3 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£30000 - £32000 per annum: Ashdown Group: HR Generalist (standalone) - Tunbrid...
£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...
£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...
£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony