Holiday scams Bank, credit and debit card charges

An American express green credit card

Card fraud abroad has been on the increase in recent years

Getting charged for withdrawing money from your bank account and purchasing goods abroad is not actually a scam, but can leave a feeling of being 'ripped off'.

Why high bank charges?

Many of us are wondering how it can cost a bank that much more to process a debit transaction in Dublin compared to London, so we asked a number of high street banks why they charge customers to spend their own money abroad.

NatWest said: 'People are using different banks and there is a cost involved in moving money between banks. There has always been a charge for being able to use debit cards abroad.'

Some cards are better than others when it comes to the charges they impose. Typically the charges, both for purchases and cash withdrawals on debit cards, range from between 1.5%-3%.

In addition to this fee, a growing number of debit card providers also charge a flat fee on any purchases identified as an 'overseas transaction fee'.

Foreign exchange loading fees

Paying for goods and services by debit or credit card is quick and convenient, and many people – especially those who don’t feel secure carrying a wallet full of foreign currency around – prefer to pay with plastic while on holiday.

We've reviewed cards that offer the lowest fees for spending abroad and prepaid travel cards to help you decide what is best for your trip.

If you want to withdraw cash, however, all credit cards charge a cash-handling fee which is usually 2%, so it's best to avoid using them to make withdrawals, both abroad and in the UK. If you do, you will also be charged a higher rate of interest from the day of the withdrawal. If you need to withdraw cash it's best to use a debit card.

Benefits of using credit cards

Despite all the potential charges, it's advisable to use your credit card to make purchases abroad rather than your debit card since your credit card company is jointly liable on all purchases over £100 and not more than £30,000 under the Consumer Credit Act.

If you plan on using any cards while overseas, be sure to inform your bank of your travelling plans before you go. Some banks automatically put a stop on your card if unusual spending habits are observed. Warn them in advance to avoid being caught out.

The problem with plastic

We are spending more on our cards overseas than ever before, leaving us increasingly susceptible to fraudulent activity.

Fraudsters are becoming progressively sophisticated too, but Chip and PIN technology has helped reduce card fraud in countries where it's employed. But there are still numerous places worldwide where this method is not used.

Tips

Despite the prevalence of card fraud, there are a number of things you can do to foil the fraudsters:

  • Always shield your PIN with your free hand when typing it into a keypad in a shop, restaurant or cash machine.
  • Guard your card and card details at all times. When paying for purchases by card, try not to let it out of your sight.
  • Safeguard your PIN. Don't give it to anyone, even if they claim to be from the police or from your bank.
  • Only take cards with you that you intend to use on holiday. Leave those you don’t need in a secure place at home.
  • Make sure you know the 24-hour phone numbers for cancelling your cards in case they are lost or stolen. Don't keep these numbers in your wallet; keep them separate from your cards.
  • Check statements carefully when you return home for unfamiliar transactions.
Which? works for you