The typical tourist overspends their holiday budget by more than £100 per trip, with surprise charges cited as the biggest contributor, according to research by The Co-operative Bank.
Hidden charges blamed for budget breaches
A poll of 2,000 adults who travel abroad found that among the most common surprise charges are currency exchange fees and data roaming. Despite 53% saying they set a strict limit before going away, more than four in ten (43%) blame unexpected hidden charges for breaking the budget.
To combat the sneaky fees, seven in 10 (70%) said they primarily pay with cash when abroad, and 44% opt to use their debit card.
Confusion over exchange fees
The study also found that 34% said they struggle to understand exchange fees. Typically, 48% will choose to pay in the local currency – the more cost-effective way – when using their card abroad at a card machine or ATM, while one in eight (13%) risks being hit by higher charges simply by selecting the pound option.
Even though the OnePoll.com study found the majority of holidaymakers (91%) check exchange rates, one in three people said they were unsure or didn’t know that paying in pounds, rather than in the local currency, would be a more expensive option.
Co-operative Bank scraps foreign transaction fees
To help travellers avoid unnecessary fees this summer, The Co-operative Bank is removing its 2.75% foreign transaction fee on debit card spending abroad across all its personal current accounts, allowing customers to spend overseas as they would at home without worrying about extra costs.
With millions of Brits heading abroad each year, the change is designed to help minimise unexpected charges and better manage holiday budgets.
Kat Robinson, head of everyday banking at The Co-operative Bank, said: “Spending abroad should be straightforward, but extra card fees can quickly catch people out. By removing foreign transaction fees, we’re making it more affordable for customers to use their debit card overseas and make the most of their money, whether they’re on a family holiday, a city break or exploring somewhere new.”
She added: “But remember, if given the option when spending abroad, always pay in the local currency. Paying in pounds might feel more familiar, but it could mean being hit with extra currency conversion charges from the retailer – a hidden cost that often only becomes clear on returning home.”
