Holiday transactions: Big banks rake in £300m by charging tourists for card use

Big banks rake in £300m charging holidaymakers transaction fees on debit cards overseas Britain’s biggest banks are raking in over £300million by charging holidaymakers hefty transaction fees on debit cards used overseas, new research has found. Some banks are charging fees as high as 2.99 percent per transaction, be it for an ATM withdrawal or paying a restaurant bill. The additional fees are extracted from a person’s current account when the transaction takes place. Tony Gibbons, co-founder and director of comparison site besttravelmoney.com , which carried out the research, said: “High street banks make large profits on debit card payments abroad by relying on brand loyalty and the inertia of consumers. ‘They often charge for transactions and it is costing holidaymakers money that could be spent on a meal or excursion. I’ve seen instances where it costs an extra $7 to withdraw $40 from an ATM in the US.’ READ MORE: Be aware of these two Martin Lewis holiday warnings if you are heading abroad Some banks are charging holidaymakers up to 2.99 percent on overseas transactions. The research is based on ONS data showing around 45.6 million visits abroad for holidays were made by British consumers in 2022 who spent £40billion collectively. Around £10billion of this was in travel money and of the remainder, approximately £15billion was on UK debit cards (in shops, restaurants and at ATMs). Most UK banks charge 2.99 percent (some charge slightly less at 2.75 percent), which makes around £328million worth of currency conversion (2.2 percent on £15billion), according to Best Travel Money. Mr Gibbons said holidaymakers could ‘consider a prepaid card’, as the savings over multiple trips can ‘quickly add up’. He added: ‘Or if you have a fee-paying account some banks will often have lower charges, it is worth checking your charges with your bank.” The comparison site said that the ‘best value’ accounts are from new banks, such as Starling, Monzo, Chase or Revolut, where using a debit card abroad is free. Online bank first direct has also just announced that it has gone ‘fee free’ for transactions made abroad with its debit card. SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info Trending