UK tourists losing £100 million a year through card fees

20 June 2017, 15:21   By Samantha Smith

BRITS are spending over £100 million a year on unnecessary card charges while holidaying abroad, according to new research from Thomas Cook.

credit card making a payment
Credit: Nattakorn_Maneerat/

The holiday provider found that over a third of UK holidaymakers regularly use their credit and debit cards abroad, despite 50% of them not knowing how much they'll be charged for doing so.

Similar examples of low finance knowledge were also uncovered by Thomas Cook's research, including the fact that less than half of travellers keep track of currency exchange rates when looking to purchase foreign money.

Together, such gaps in awareness highlight how, even though such things as the removal of EU roaming fees now suggest otherwise, it's still dangerous to assume that charges from providers remain constant regardless of where customers are in the world.

£3.7 billion spent abroad

Related stories
How to dodge air passenger duty
The demise of uncapped interchange fees
Triodos launch ethical bank account
FCA weighing up overdraft cap

In surveying 2,635 British travellers, Thomas Cook didn't simply discover that UK tourists are spending around £104.1 million a year on card fees alone.

They also learnt that, of the nation's 45,020,000 travellers, "half do not know how much they will be charged" by their bank for using their cards while on holiday.

In other words, many are being stung with unexpected and sometimes high fees, although it should be noted that an average fee rate of 2.73% means that the average tourist - who spends £217 abroad every year - is paying only an extra £4.34.

However, since £4.34 is only an average, some are paying considerably more every year, while others are also being hit by another blind spot in their touristic financial planning.

Namely, Thomas Cook also discovered that "less than half keep track of currency rates in order to change money when the rates are good. A total of one third use the pay day closest to departure to buy their currency".

To put this in some perspective, on the day after the EU referendum, a British tourist would have received only $532 in spending money in return for £400, whereas on the day before they would have received approximately $600.

This goes to show that, for those saving up for their holidays, it pays to keep abreast of currency movements, since they can on occasion make a tangible difference to what tourists are able to purchase abroad.

Six golden rules

And since such factors as currency movements can make a noticeable difference to spending power, Thomas Cook have come up with six "golden rules of travel" money.

Commenting on them, Managing Director at Thomas Cook UK, Chris Mottershead, explained, "We know that for many a summer holiday is the most valued and important two weeks of a year. Our six golden rules of travel money represent simple and realistic ways to make customers' hard-earned cash go that bit further this summer".

In order of importance, these six rules are:

  1. Never leave it until the last minute. The average spend on holiday for a family of four over two weeks is £1,000. How many other transactions of that size would you leave to chance?
  2. Check exchange rates a few months before departure. Save up and then buy when the rate is good. You can set alerts to your phone or computer and be notified when the rate gets to a certain level
  3. Take a mixture of cash and pre-paid card - you'll still need cash for the little things, like tipping, but most places take plastic
  4. Use a pre-paid card as much as possible for point of sale transactions and ATM withdrawals - only use your debit / credit card as a last resort and always select to pay in local currency, never GBP
  5. Minimise cash withdrawals - depending on the ATM, your bank and what currency you select, you could end up paying on average 2.73% in fees (and often an ATM fee)
  6. Buy attraction tickets in advance.

Other charges

Of course, aside from highlighting tourists to the dangers of glibly assuming that all they have to do to make the most of a trip abroad is buy tickets and save up money, Thomas Cook's research also offers a timely reminder as to "hidden" bank charges.

For instance, despite the popular idea that most high street banking is "free," the UK's biggest banks often make over the odds with unauthorised overdraft charges, which according to the Competition and Markets Authority earned them £1.2 billion in 2014 alone.

And once again, this revenue is being generated without many customers being aware of the costs of their overdrafts, highlighting how - just as with overseas card charges - banks are all-too often profiting from our ignorance.

Get insider tips and the latest offers in our newsletter

independent comparison

We are independent of all of the products and services we compare.

fair comparison

We order our comparison tables by price or feature and never by referral revenue.

charity donations

We donate at least 5% of our profits to charity, and we aim to be climate positive.