Going on a well-earned family holiday can be an expensive business, so the last thing you want is to incur more credit charges charges and debit card fees. However, according to a new study, Brits are racking up millions of pounds in such costs after being left confused by prepaid currency cards.
Travelex, a foreign exchange firm, found that the majority of British holidaymakers (77%) who venture abroad in the summer months will use a credit or debit card to withdraw cash or fund purchases - even though they are aware of the costs involved.
It estimates that holidaymakers could incur in excess of £100 million in fees and charges by using their credit and debit cards abroad this summer.
Nearly half (48%) said they had deliberately chosen not to take a prepaid card because they were confused about which one to select.
When questioned, four in ten (41%) said that choosing a prepaid card was "extremely difficult", while the majority (68%) revealed they couldn't work out which card offered them the best value. Such confusion means thousands of families are missing out on holiday savings as well as the security benefits of carrying a prepaid travel money card.
Credit and debit card fees
Currency conversion or load fees are the most common types of fees which are incurred by holidaymakers when abroad.
These are imposed by providers each time you use your credit or debit card outside of the UK, and they usually charge you, on average, 2.75%. This could add up to an extra £70 over the course of a holiday when compared to using the cheapest prepaid card, it is believed.
The prepaid route
Prepaid cards allow you to keep tighter control on the spending money you have saved for your holiday budget.
The majority can be used all over the world and some even offer 0% foreign exchange fees. Providers can also cancel and replace cards if they are reported lost or stolen.
However, the fees and charges which may apply with such cards - like ATM withdrawal fees and top-up charges - can be confusing. It is therefore important that you compare rates beforehand to find a card that suits you.