Brits To Throw £627m Away With Bank Charges This Summer, According to Caxton
LONDON, May 21, 2024 /PRNewswire/ -- The 'shoulder season' is upon with double the number of Brits expecting to travel this May and June to save on high season costs. However, budget conscious Brits defaulting to debit cards abroad could be stung by an extra £32.32 bill reveals research by payments firm Caxton.
This is due to card fees banks impose on customers who pick the wrong plastic to use overseas – with charges of up to 2.99% for each overseas transaction, and 4.75% for getting cash.
Calculating these fees against new holidaymaker data on summer spending and ATM use, consumers could waste an average of £32.32 per trip on charges1. With 19.4 million foreign holidays taken by UK residents between July and September last year, Brits following suit could face a bill of £627m this summer2.
The tourist 'tap'
Caxton research shows Brits make an average of 19 card transactions overseas, typically spending £32.33 per tap1. During their trip they'll take money out three times, withdrawing around £150 each time1.
In the UK, debit cards account for half of all payments made, with contactless methods surging by 30%3. Using these cards abroad can become an unnecessary holiday expense.
Toll in the wall
Most high street banks charge for using their standard debit cards overseas as a cost for converting the money from pounds into a foreign currency.
This conversion fee typically applies to both spending and taking out cash abroad with a debit card. However, for ATM use HSBC also adds on a 2% non-sterling cash fee for standard account holders, meaning customers will be charged 4.75% of the amount withdrawn.
Although the number of foreign holidays Brits took rose 12% last summer, the research showed the typical card use per person had fallen year on year, with purchases down 10% and spend per transaction down 2%4 5. Over the same period the average amount UK consumers withdrew from cashpoints was up by 17%, while the number of ATM withdrawals per trip dropped 7%, suggesting a greater focus on budgeting and fewer impulse buys.
Caxton Chief Operating Officer, Alana Parsons commented: "When you're abroad it's easy to let your guard down when it comes to bank card fees. We've become used to making quick taps with our cards, so it's understandable why many people continue to do so on holiday.
"However, this leads to needless charges. To break the habit – and hold onto your hard-earned cash – get a currency card for holiday spending. Having a separate card will help you budget and can also be pre-loaded with the money you need – so you can relax."
Notes to Editors:
Download full release and figures
1 Caxton researchers analysed 1,249,798 foreign currency transactions made by 64,737 consumers and 81,751 overseas ATM withdrawals made by 27,922 consumers between July and September 2023; These figures were used with the high street bank debit card fees to calculate the average bill of using a high street debit card overseas Contact [email protected] for the full analysis
2 ONS: Overseas travel and tourism: July to September 2023; 19.4 million x £32.32 = £627,008,000
3 UK Finance: Half of all payments now made using debit cards
4 ONS: Overseas travel and tourism: July to September 2023
5 Caxton 2023 research showed average amount withdrawn at overseas ATM from July to September 2022 = £126.63; Average count withdrawals = 3.16
About Caxton
Caxton is an award winning fintech payments company which processes tens of millions of international and domestic transactions each year. Website: https://www.caxton.io/cards
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SOURCE Caxton
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