For immediate release
Holidaymakers charged five times more for debit and credit cards abroad than prepaid currency cards
26 September, 2018, LONDON –
New research from personal finance comparison site finder.com reveals that holidaymakers using debit and credit cards abroad are being charged nearly five times as much (388 percent) in fees as those who use a prepaid currency card.
Debit and credit cards cost British travellers an average of £39 in fees per year, compared to just £8 for prepaid currency cards or £22 for travel money bought at currency exchange bureaux.
Brits spent an average of £616 abroad in 2017, totalling a £1.9 billion charge in travel money fees. However, with prepaid cards, the figure would have been £552 million. This would result in a collective saving of £1.4 billion and an individual saving of £31 per person, per trip. The savings could be even greater with new debit cards, such as Revolut and Starling, who charge no fees for foreign usage.
Currently, the most popular way of paying for goods abroad is with foreign currency bought at a bureau de change, with 59 percent of Brits doing this. Almost half (46 percent) of Brits use debit and credit cards, while only one in six (16 percent) uses a prepaid currency card.
Baby boomers are the most likely to use exchange bureaux when going away (67 percent), but they’re the least likely to use prepaid currency cards (12 percent). In contrast, a fifth (19 percent) of millennials use prepaid currency cards abroad, making them the most likely to use this method.
To see more statistics and infographics on different payment methods abroad, visit: https://www.finder.com/uk/money-transfer-statistics.
Speaking about the findings, Jon Ostler, CEO at finder.com commented: “With many banks imposing charges and commission fees when you use your card abroad, the costs can quickly add up. You may well be aware that withdrawing money from a foreign ATM can result in charges but even a small purchase using contactless can see you being hit with disproportionate fees on some cards.
“Prepaid currency cards, and a few new debit or credit cards like Starling and Revolut, are a good alternative to consider. As our research shows, they generally cost a lot less than traditional cards or exchange bureaux, allowing you to spend more on your actual holiday. If you don’t want to switch your credit card or leave your current bank, you could consider getting one of these cards just for your trips abroad.”
The average fees per trip for each currency conversion method were calculated by:
- Taking the average spend per trip, according to the ONS
- Recalculating it to exclude transaction fees
- Multiplying this by that method’s average exchange rate to get the amount received in the foreign currency. The average exchange GBP to EUR exchange rate for five popular providers of each method was used.
- Converting this back into pounds using the mid-market rate
- Finding the difference between the figures found in (4) and (1).
The overall average fee per trip was then found by multiplying each method’s average fee, by the proportion of people who use that method, according to our own survey results.
This was then multiplied by the total number of trips taken in 2017 according to the ONS to get the total amount spent in fees.
- Finder.com also commissioned Onepoll to carry out a nationally representative survey of adults aged 18+.
- A total of 2,477 people were questioned throughout Great Britain, with representative quotas for gender, age and region.
- The research was conducted between 8 and 13 June 2018.
- Jon Ostler, CEO (UK) at finder.com is available for comment, opinion or interview regarding the research
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com's review pages for the current correct values.
finder.com is a personal finance website, which helps consumers compare products online so they can make better informed decisions. Consumers can visit the website to compare utilities, mortgages, credit cards, insurance products, shopping voucher codes, and so much more before choosing the option that best suits their needs.
Best of all, finder.com is completely free to use. We’re not a bank or insurer, nor are we owned by one, and we are not a product issuer or a credit provider. We’re not affiliated with any one institution or outlet, so it’s genuine advice from a team of experts who care about helping you find better.
finder.com launched in the UK in February 2017 and is privately owned and self-funded by two Australian entrepreneurs – Fred Schebesta and Frank Restuccia – who successfully grew finder.com.au to be Australia's most visited personal finance website (Source: Experian Hitwise).