The cost of withdrawing money abroad from cash machines

An estimated £14.2 billion was withdrawn by British holidaymakers on debit cards and credit cards whilst travelling abroad in the past year, costing holidaymakers £391 million collectively in withdrawal fees, according to research from Sainsbury’s Travel Money.

While it's commonly accepted that you may pay a fee or a minimum charge for withdrawing cash abroad using a debit or credit card, travellers may not realise that the majority of prepaid currency cards also levy individual transaction fees. Holidaymakers relying on prepaid money cards to withdraw cash abroad are also being hit in the pocket, as the research reveals that two thirds (65.3%) of these cards charge customers to access their money abroad.

It is important holidaymakers realise not all prepaid currency cards are the same. For those that charge, the average fee for a withdrawal within the Eurozone is €1.88, with the most expensive provider charging €3 for every transaction. Furthermore, the findings reveal that one in 20 (6.1%) of the prepaid cards on the market even charge customers to check their balance.

The findings reveal that £11.5 billion was withdrawn on debit cards in ATMs outside the UK by 14.8 million people in the past year, an average of £778 per person. Approximately half (49.5%) of holidaymakers claimed to have withdrawn money on their debit cards abroad. 

Overseas credit card withdrawals were less common, with around 3.7 million people (7.8% of holidaymakers) admitting to withdrawing a collective £2.6 billion on credit cards, an average of £726 each.

With typical withdrawal fees of 2.75% for both debit and credit cards, Sainsbury’s Finance estimates that holidaymakers spent an extra £391 million accessing their own money while overseas in the last year. This equates to £41 per year for a typical customer withdrawing on both their debit and credit card. Of course this is even before you consider any fees levied by the providers of the ATM itself, like here, they're not all free to use in the first place.

While there is no difference between the debit card usage of men and women abroad (50.0% to 49.5% respectively), men are around 50% more likely than women to use their credit cards to withdraw cash while overseas. However, while fewer women use overseas ATMs to withdraw cash, those that do withdraw considerably more on average. Around 15.2% of men used their credit cards to withdraw foreign currency, typically taking out £645 over the last year, compared with one in ten (10.4%) of women, who withdrew a higher average of £852 each.

David Barrett, Head of Sainsbury’s Travel Money, said: “As a nation, we spend a huge amount every year on our holidays. A person withdrawing the average amount on their debit and credit cards whilst on holiday will spend £41 per year purely to access their cash – and that’s before looking at other incurred costs. Indeed there are only a handful of credit cards, such as our own Gold Card, that don’t charge withdrawal fees at overseas ATMs.”

“Prepaid cards can be an excellent way to make your money go that little bit further, providing you choose carefully. It’s important to shop around and know what you’re getting, as many people get stung by charges they weren’t anticipating. As a result those who withdraw smaller sums from ATMs on a frequent basis could be paying well over the odds for their holiday cash.”

Along with the savings benefits of using a charge-free prepaid card, travellers can also benefit from the ability to acquire a replacement card so there's no risk of losing your money. With the Sainsbury’s Cash Passport there’s a 24/7 emergency service and a free replacement up to the value of the card’s balance should the worst happen.

To find out more about Sainsbury’s Travel Money log onto sainsburysfinance.co.uk.