Don’t Get Stung With Foreign Transaction Credit Card Charges

A recent survey by uSwitch has found that Britons will spend around £11.5 billion and withdraw around £10.5 billion in cash. In effect, these transactions alone could cost consumers an additional £607 million in foreign transactions alone.

With credit cards used so frequently and commonly in the UK, consumers may overlook or not even realise about the charges that apply when purchasing goods or services when they are abroad.

A standard charge for foreign use by many credit card providers is 2.75% on the transaction amount. Therefore, if you spend the equivalent of £100 abroad you will incur a charge of £2.75, painful if you don’t know about this.

Alternative Cards?

There are a few credit cards on the market that don’t charge for foreign transactions, Nationwide being the most famous of all. Other providers who don’t charge a fee are Saga and Liverpool Victoria.

Visit Nationwide here.

Another disturbing fact that uSwitch have discovered is the amount that we will withdraw on our credit cards when abroad. This figure is close to what we spend and when you consider the additional charges on these cash withdrawals it seems that this could be some of the most expensive borrowing available.

A sample of possible charges that you could face.

• Foriegn transaction charge – Normally 2.75% of transaction amount
• Cash Advance Fee – Normally 2% or £2 – Whichever is greater
• Missed payment - Normally £20 to £25

If you are planning to go abroad set up a minimum direct debit. This will save you being penalised for missing any payments and you can always pay the balance in full if you so desire.

Joseph Kenny
11/4/06

 

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