Half term travellers risk holiday cash hangover
27 October 2009
New research from First Rate Exchange Services has revealed that less than half (48 per cent) of UK holidaymakers calculate how much cash they will need for their for overseas holiday spend, resulting in many paying far more for their holiday money through costly cash withdrawals from ATMs whilst overseas.
With ATM usage and commission fees* costing around £6 for credit card cash withdrawals, and £5 for debit cards* when withdrawing the average transaction of £108 in foreign currency, just a few withdrawals across the course of a holiday can result in a significant increase in spend. So its perhaps not surprising that almost a third of travellers (32 per cent) stated that failing to budget correctly had resulted in overspend, and a financial holiday hangover that lasted well beyond the fight home.
In fact last year over £7.8bn was withdrawn from ATM’s overseas by UK travellers resulting in an estimated £326 million* being spent on commission and cash advance fees alone.
When it comes to holiday cash calculations the Welsh are the most likely to set a budget on how much they’ll need – this pre-planning obviously pays off as only two per cent of people from Wales say they usually spend far more than they’d hoped.
People in the North West are most likely to just hope they have sufficient cash – only 36 per cent estimate how much they’ll need before they depart. So it’s probably no surprise that almost half (45 per cent) of people from the region spend more than they thought they would while away.
However, it’s Londoners who are most likely to have to pay more to withdraw their cash overseas – more than one in five (22 per cent) do not take any cash with them at all.
When it comes to being canny with cash, holiday makers in the North East are most likely to shop around for the best rates, almost two thirds (62 per cent) said they’d do their homework and seek out the best deals on offer.
Gordon Gourlay, First Rate Exchange Services said: “Millions of half term holidaymakers may be running the risk of paying high commission charges by waiting to get their holiday cash from ATMs overseas.
“Good value and convenience remain the drivers for holiday makers when picking up their cash, with opportunities still existing for many retailers providing essentials, from swimwear to travel insurance to add an in store or online currency service to their current service range.”
First Rate Exchange Services is the UK’s leading provider of foreign exchange services to foreign currency retailers. It provides a wide range of white labelled foreign exchange services available to businesses large and small across the UK.
* All statistics (unless stated tbc) from survey of 783 UK holidaymakers who travelled in August 2009. Undertaken for First Rate by YouGov September 2009.
Different card providers have different terms for different charges. These include: Overseas ATM charge; cross border transaction fee; loading fee; commission; cash advance. But regardless of what they call the fees, they typically charge two of the above fees.
Average credit card charge on £108 is £6.21 in and for debit cards £5.13 (FRES Research April 2009).
APCS UK Payment Statistics July 2009 show overseas cash withdrawals total £7.8 bn. Estimated that 62m debit cards and 7m credit card withdrawals per year, plus 3m ATM card transactions. Figure includes estimate of number of non-fee charging cards used overseas.