Brits pay out unnecessary foreign exchange fees

Britons incurred a staggering £122 million pounds in unnecessary foreign exchange fees when using their credit card abroad last year, new research by Santander Cards has revealed.

The massive sum was generated after Britons spent £1.5 billion on credit cards overseas in 2009 - an average of £600 per traveller. Nearly all credit cards in the market impose a foreign exchange fee of around 2.75 per cent on purchases made abroad, generating a hefty bill for travellers but one that is entirely avoidable.

Of the 25 million Britons who went abroad in 2009, the average time spent overseas during the course of the year was three weeks. However, more than 7.5 million of us (30 per cent of travellers) were away for four weeks or more.

Almost five million people (one in five travellers) used a credit card as their primary means of making purchases abroad last year, while a further eight million chose a credit card as their secondary payment method.

While Britons spent an impressive £15 billion in total overseas last year, one in five travellers (19 per cent) are planning to reduce the amount they spend abroad this year due to the weakness of the pound.

Emma Roberts, Director of Santander Cards, commented: "With many Britons embracing a more careful approach to their spending, foreign exchange fees are one expense that those travelling abroad this year can definitely do without. The Santander Zero Credit Card is one of the only cards on the market to offer fee-free foreign usage anywhere in the world, providing our customers with peace of mind and leaving them with more money to enjoy their trip."

The research showed that more than half of people (52 per cent) still pay with cash when abroad. Credit cards are the second most popular method of payment, followed by debit cards (15 per cent) and traveller's cheques (5 per cent).

Last month, Santander announced its latest initiative to reward existing customers. Customers who have a current account or mortgage with either Santander UK or Alliance and Leicester can now apply for the award winning Santander Zero Credit Card and benefit from a zero per cent balance transfer fee for 12 months, in addition to the existing Zero benefits of fee-free foreign transactions anywhere in the world, zero per cent interest on purchases for three months, and no cash advance fee.