Holiday overspending is on the cards for one in three
Almost one third of holidaymakers overspent on their last foreign holiday, and have a significant lack of knowledge of how withdrawing cash overseas can pile on the pounds, according to research from N&P (Norwich & Peterborough Building Society).
The study found one third (31%) of holidaymakers admit to overspending on their last holiday overseas, with one in six who have been abroad in the last year going 20% or more over budget. The 18 to 34 year old age group is most likely to overspend overseas, with 40% of them admitting to busting their budgets on a recent holiday.
The temptation to loosen the purse strings while on holiday is clear enough, but holidaymakers are not at all clear on how expensive using their debit card can be while overseas, and that could lead to a nasty surprise when they return home.
On average holidaymakers reckon they would be charged £4.20 in fees to withdraw £250 from an overseas ATM using their debit card, but in reality it can cost nearly three times that at a few pence less than £12. Surprisingly, only one in ten (9%) actually believe that using a debit card abroad could be free.
Just one in 20 (6%) of those questioned accurately estimated that most providers are likely to charge them £10 or more in fees to withdraw £250 worth of local currency. And with 55 million trips abroad by UK residents in 2010, the potential unexpected cost to consumers could be astronomical.
Ewan Edwards, head of current accounts at N&P, said: "It might seem boring to stick to a budget when you are on holiday, but overspending can mean paying for your annual holiday for months to come.
"Keeping control of costs is important. Over the years people have realised the increase in cost of using a mobile phone abroad and have altered their behaviour to ensure they aren't stung by a massive phone bill when they return home. The same thinking should apply to the plastic you take on holiday with you.
"Holidaymakers need to remember that unless they have a debit card from a provider like N&P, who doesn't charge for ATM withdrawals and point of sale transactions when paying for meals out, excursions, car hire or souvenirs, charges will mount up and this could mean £70 in charges over the course of a two week holiday for a family. Overall this is costing holidaymakers many millions of pounds."
According to recent figures from The UK Cards Association, a massive £27.5 billion worth of transactions were carried out abroad with UK plastic in 2010, with over £7.2 billion being withdrawn from cash machines outside of the UK. The UK Cards Association has also seen a 364% increase in debit card use overseas in the last decade.