Imagine this: you’re on a dream vacation, soaking up the sun and exploring new cultures. But then, wham! You return home to a hefty bill full of surprise bank charges. Yuck, right? travel debit card fees

Unfortunately, this scenario is all too common for British travelers. New research by Caxton, a payments firm, reveals that Brits could be throwing away a whopping £32.32 per trip due to sneaky bank fees when using their debit cards overseas.

That might not seem like much on its own, but considering the millions of Brits traveling abroad this summer, the total cost could reach a staggering £627 million. Yikes!

Why Debit Cards Abroad Cost You More

Who is the culprit behind these fees? Those seemingly convenient debit cards we all use daily. Many high-street banks charge a conversion fee when you use your debit card overseas. This fee applies to both spending money and withdrawing cash.

Think about it like this: every time you tap your card in a foreign shop, or take out cash at an ATM, your bank acts as a middleman, converting your pounds into the local currency. But for this service, they take a cut – a fee that can be as high as 2.99% per transaction and a whopping 4.75% for ATM withdrawals.

These fees might seem small, but they can quickly add up, especially if you’re making multiple purchases or withdrawals throughout your trip.

Fewer Transactions, More Withdrawals: Are We Budgeting Better?

Interestingly, the Caxton research also revealed a shift in how Brits are using their cards abroad. While the total number of foreign holidays taken increased last summer, the average card use per person actually decreased.

People are making fewer purchases overall (down 10%) and spending less per transaction (down 2%). On the other hand, the average amount withdrawn from ATMs went up by 17%, with fewer total withdrawals (down 7%).

This suggests a trend towards more budget-conscious travel, with fewer impulse buys and a focus on larger cash withdrawals.

The “Tourist Tap”: How to Break the Habit and Save Money

So, what can you do to avoid these pesky bank charges and keep more money in your pocket for gelato and souvenirs? Here’s the secret weapon: a currency card.

A currency card is a prepaid card specifically designed for spending abroad. You can load it up with the amount of money you need for your trip, and then use it just like a normal debit card. The beauty of a currency card is that it often comes with significantly lower fees compared to using your regular debit card. Plus, having a separate card can help you stay on budget by keeping track of your spending more easily.

Benefits of Using a Currency Card While Traveling

• Lower fees: Save money on those pesky conversion fees and ATM charges.
• Budgeting made easy: Pre-load your card with your spending limit to avoid overspending.
• Peace of mind: Reduce the risk of losing your main debit card or having it compromised while traveling.
• Convenience: Accepted at millions of locations worldwide, just like a regular debit card.

Not All Currency Cards Are Created Equal: Do Your Research

While most currency cards offer lower fees than standard debit cards, it’s still important to compare options before you choose one. Look for cards with:

• Competitive exchange rates: Get the most bang for your buck when converting your currency.
• Transparent fees: Make sure you understand all the charges associated with the card.
• Wide acceptance: Choose a card that’s accepted at most ATMs and shops in your destination.

By doing a little research and choosing the right currency card, you can save a significant amount of money on your next trip abroad.

Caxton Travel Card: Your Smart Spending Solution

Caxton offers a feature-rich travel card that could be your perfect travel companion. With competitive rates, low fees, and worldwide acceptance, you can explore the world without worrying about hidden charges.

Visit the Caxton website today to learn more and apply for your travel card!

FAQs – Frequently Asked Questions About Saving Money While Traveling

1. Are there any free ways to avoid foreign transaction fees?

Some banks offer debit cards with no foreign transaction fees. However, these cards may have other drawbacks, such as monthly fees or unfavorable exchange rates.

2. Can I use my credit card abroad?

Yes, you can use your credit card abroad. However, there are a few things to keep in mind:

• Foreign transaction fees: Many credit cards also charge foreign transaction fees, typically around 1-3%. While this might be lower than your debit card’s fees, it’s still a cost to consider.
• Cash advance fees: If you use your credit card to withdraw cash from an ATM abroad, you’ll likely be hit with a hefty cash advance fee (often around 3-5%), on top of any foreign transaction fees. It’s generally best to avoid using your credit card for ATM withdrawals.
• Interest rates: Credit card interest rates can be high, especially for foreign transactions. Make sure you pay your balance in full when you return home to avoid accruing interest charges.

Overall, a currency card is often the most cost-effective way to spend money abroad. However, if you do choose to use your credit card, be aware of the fees involved and use it strategically.

Revolut can be a good option to avoid foreign transaction fees while traveling, here’s a breakdown:

• Foreign Transaction Fees: Revolut generally doesn’t charge any foreign transaction fees for spending or withdrawing in a foreign currency, regardless of weekdays or weekends. This applies to their standard plan.
• Free Allowance: There’s still a monthly limit on this free exchange benefit. The standard plan offers a free allowance of £1,000 per month. If you exceed this limit, a 1% fee applies to the transaction amount.
• Premium Plans: Upgraded plans like Revolut Plus (£3.99/month) and Revolut Premium (£7.99/month) offer higher free allowance limits or even waive them entirely.
• ATM Fees: Watch out for ATM fees! While Revolut itself doesn’t charge for using your card at ATMs abroad, the ATM operator might. It’s always best to choose “withdrawal without conversion” at the ATM to avoid additional fees.
• Current Exchange Rates: Revolut offers competitive exchange rates with live updates within their app. You can always check the exchange rate before making a transaction.

Overall, Revolut can be a great option for travelers who want to avoid foreign transaction fees, especially if they stay within the free monthly allowance and avoid weekend exchanges. For frequent travelers or those exceeding the free limits, a premium plan or a different travel card with a higher free allowance might be more suitable. travel debit card fees