A glowing tan without financial burn

Fees and hidden costs for using credit and debit cards abroad are increasing. Make sure you don’t return home to some blistering bills.

After a never-ending winter, the sun has finally got its hat on! Spring has sprung and now is the season of holiday planning and rash diets.

But as important as it is to pick out a bikini or scour holiday websites for a bargain, it’s equally as important to make sure you’re not throwing away your money on unnecessary fees while sunning yourself in warmer climes.

By using the right combination of your credit and debit cards you can avoid falling prey to some of the unsightly charges banks and credit cards can levy. For example, each time you spend £30 in a shop or restaurant with a debit card, some banks can add up to 6 per cent to the tab. It can be the same with buying low cost flights, bargain holiday packages or hotels which you can be charged a card fee on top, depending on how you pay, and all before you’ve even left the country.  But equally, taking money out on your credit card can be a big no-no, as you’ll be not only stung by withdrawal fees but also hit with extra hidden charges.

The way to avoid these fees is to make sure you’re clued up as to what charges you may face. These aren’t always straight forward as issuer can be sneaky about what they chose to tell you (or not). Follow some simple tricks to make sure you don’t get more than you know exactly where you’re splashing your cash.

–          Keep a look out for cards with no overseas fees, these are great but they’re also  becoming thin on the ground.

–          Shop around before you go abroad but be careful when taking money out at the airport as it is a captive market, those outlets may charge more. Try using a cash comparison site to squirrel out the best buys.

–          Call your bank or credit card provider and ask them to spell out clearly what you’ll be charged, when and how.

–          Plan ahead. When banks charge a minimum amount for a withdrawal, say £2, it’s uneconomical to take out less than £100 a pop, so make sure you know what you’ll need.

–          Use credit cards to buy more expensive items, such as flights or even bigger items while you’re actually on holiday as they can offer you extra protection, such as insurance. BUT always pay your balance off in full.

–         Use a debit card to take out cash, they’re almost always cheaper. All credit cards charge a cash withdrawal fee, which means you may end up paying interest, even when you’ve repaid your balance in full. This is because cash advances from your credit card will not only incur a cash advance charge but will also start to accrue interest (often at a significantly higher rate than other purchases) right away.

–          Euros or pounds? If your bank gives you the option of paying in pounds or the local currency, always choose the latter. Exchange rates vary and your provider will look for the best exchange rate for them but not always for you.

–          Get a better credit card! Most cards add a 3 per cent cost to the exchange rates. Avoid this by hunting out a specialist card that doesn’t add this unnecessary cost.

Bon voyage!