/ Money

No excuse for high holiday card charges

Australian notes

Charges for using your card overseas have steadily risen over the past few years. Nowadays it’s hard to take a trip without being forced to cough up fees of at least a tenner, and sometimes much more.

Part of the problem is that most consumers are blissfully ignorant of just how much they’re paying to use their cards overseas.

When it comes to credit cards, almost all will hit you with a 3% fee for every transaction you make outside the UK. Though this charge is typically worked into the exchange rate, meaning it won’t show up on your statement.

When it comes to debit cards, the web of fees and charges is even more complex, with different banks employing very different sets of charges.

More banks join the charging game

Santander, for example, will charge you 2.75% every time you use your card. On top of this, it’ll add an additional £1.25 per transaction (or an extra 1.5% if you’re withdrawing money from a cash machine). So, on a £100 cash withdrawal that adds up to an exorbitant £4.25.

The good guys in this market have always been Nationwide – who until a couple of years ago charged no fees on their credit card or debit card for use abroad. Eventually, however, they introduced a 1% fee for transactions outside of Europe, but still remained far ahead of most of their competitors.

Sadly, from November this year, they plan to introduce a 2% charge on all overseas transactions, and will add an extra £1 if you’re withdrawing cash. Many of you have commented that you’ll be closing your account as a result.

No defence for high charges

Although I respect the banks’ right to turn a profit, I simply can’t see the justification for such high charges for card use abroad. The cost to the bank is a fraction of what they’re charging consumers.

If you’re heading on holiday over the next few weeks, my advice is to be very careful. The Post Office, Saga and Halifax all have credit cards that have no charges on transactions, but when it comes to cash withdrawals, you may be better taking out a separate pre-paid card.

It’s getting harder and harder to avoid getting caught by the banks’ net of fees, but if you’re willing to jump through hoops, it’s still just about possible.


One would have thought that in today’s world banks would have been concerned to make international transactions easier. Instead they seem bent on making them more difficult. Arcane and expensive methods of transferring money overseas have opened the way for dubious organisations like PayPal which, though expensive and quite occasionally hacked, is simple and does work.

It’s time, surely, to have regulation with regard to international credit and debit card transactions to ensure that no unfair barriers to trade and travel are erected. Ever tried to pay for petrol in the US or Canada using cash? It’s like presenting a cheque in a lot of filling stations in this country — they don’t accept it.

W.S.Becket says:
23 March 2011

There seems to be an immutable law of modern commerce: Globalisation will always favour the other party.