The average holidaymaker overspends their travel budget by more than £100 per trip, with surprise charges identified as the primary culprit. A survey of 2,000 adults who holiday abroad found that currency exchange fees and data roaming are among the most frequent unexpected charges encountered.
Budgeting Challenges Abroad
Despite 53% claiming they set a firm spending limit before heading off, more than four in ten (43%) end up over budget due to unforeseen hidden charges. To tackle these sneaky fees, seven in ten (70%) said they rely mainly on cash while abroad, while 44% choose to use their debit card instead.
Expert Advice on Avoiding Extra Costs
Kat Robinson, head of everyday banking at The Co-operative Bank, which conducted the research as part of its announcement to scrap foreign exchange fees on debit card spending overseas, said: “Spending abroad should be straightforward, but extra card fees can quickly catch people out.”
The research also revealed that 34% of people struggle to get to grips with exchange fees. On average, 48% opt to pay in the local currency when using their card abroad, which is reported to be the most cost-effective way to pay. Kat added: "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."
Common Misconceptions
Despite the OnePoll.com study finding that the majority of holidaymakers (91%) check exchange rates, one in three admitted they were unsure or unaware that paying in pounds, rather than the local currency, would actually cost them more.
Bank Action to Help Consumers
To help holidaymakers dodge unnecessary charges this summer, The Co-operative Bank is scrapping its 2.75% foreign transaction fee on debit card purchases abroad across all its personal current accounts, enabling customers to spend overseas as they would at home without fretting about additional costs. With millions of Britons jetting off abroad each year, the move is intended to help reduce unexpected charges and better control holiday spending. Kat concluded: “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.”
