Hidden costs of plastic

WE ALL know the mantra: tickets, passport, money. These are the vital ingredients for a holiday abroad, and the banks, building societies and bureaux de change have been earning nicely from travellers' need for foreign money for many years.

But there are already more than 1 billion automatic teller machines (ATMs) around the world that accept credit and debit cards. So should you just take your plastic on holiday?

It is tempting to leave financial arrangements until you arrive at your destination, but you can run into problems. ATMs break down and run out of money. You may also have to travel to an ATM once you reach your destination.

Even if you avoid technical problems, plastic withdrawals can be dear. Credit-card withdrawals are subject to a withdrawal fee or handling charge, plus "foreign loading" - the charge made for allowing you to obtain money abroad.

Foreign loading on Visa credit cards ranges from 1.25 per cent to 2.75 per cent. MasterCard doesn't charge foreign loading but most MasterCard issuers do, and again this ranges from 1.5 per cent to 2.75 per cent.

On top of that, both MasterCard and Visa charge withdrawal fees and handling charges from 1.5 per cent to 2.75 per cent. If you withdraw pounds 200 on a Lloyds Bank MasterCard, for example, it will cost you 1.5 per cent withdrawal fee plus 2.5 per cent foreign loading. That's a total of pounds 8 for the transaction before you start paying interest on the advance, and the interest charged for cash advances is higher than for purchases made on your card.

Debit cards represent slightly better value because you're taking money directly from your bank account, so there's no interest to pay. But there is still a withdrawal fee and foreign loading. This could work out quite costly if you make several withdrawals.

The cheapest credit cards for money advances are Northern Bank MasterCard or Classic Visa, which don't charge handling fees, and Clydesdale MasterCard and Woolwich Visa or Mastercard, which don't charge foreign loading. The best value debit cards are NatWest Cirrus, Abbey National Visa and Bank of Scotland Visa.

But if you're not already a holder of one of these cards you're unlikely to apply for one just to use on your holiday. It makes more sense to hunt down the cheapest providers of foreign currency and traveller's cheques (see table). One of the best deals is British Airways' joint venture with Travelex bureaux de change.

What if the worst happens? If your Visa credit or debit card is lost or stolen, you need to contact your card issuer to put a stop on your card. There is a list of card issuers' numbers in the Visa Holiday Money guide, free on 0171-231 5432. For MasterCard, Maestro and Cirrus you also have to notify your card issuer, so remember to make a note of its number before you leave on holiday.

q Kathleen Hennessy is assistant editor of 'Moneywise' magazine.

Holiday money

Cheapest currency providers

Provider Commission Handling Charge Total cost

for pounds 500

American Express pounds 3 None pounds 3

Bank of Ireland 0.2% min pounds 3 None pounds 3

British Airways* 0.75% min pounds 1.25 None pounds 3.75

*only for BA customers

Cheapest traveller's cheques

Provider Buying commission Total cost of Selling back

sterling cheques pounds 500 worth of commission cheques

British Airways* None pounds 1.25 None

American Express 1% pounds 5 None

Thomas Cook Direct None pounds 5 None

*only for BA customers

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam