Mutuals offer the best deals for debit card usage abroad

With Consumer Focus issuing a super complaint to the OFT regarding the cost of holiday money, Andrew Hagger of Moneynet looks at the cost of using your debit card abroad.

"While consumers may get confused and upset over the cost of credit card charges and currency purchases, it's the debit card market where we see the widest variation in charging tariffs.

"The comparison below highlights the difference in fees incurred on an overseas holiday, based on five £100 (currency equivalent) cash withdrawals and eight £50 debit card purchases.

"The building societies are offering the most consumer friendly tariffs, but it's the banks that charge a fixed fee for debit card purchases that customers need to be most wary of.

"The purchase transaction fees range from £1 (Lloyds TSB) to £1.50 (Halifax), regardless of the size of the debit card transaction and are in addition to the 2.75%/2.99% foreign loading fees.

"If you're not aware of the purchase transaction costs, a holidaymaker making a large number of low value transactions will get a nasty surprise when the post holiday statement lands on the doormat.

"The table below shows the cost of debit card charges (including both cash and purchases) is currently split into three groups with the building societies coming out tops and the banks with no purchase transactions sitting mid table, whilst the bottom four are the most expensive and a particular area where the OFT needs to focus its attention.

"I hope the OFT grabs this opportunity to thoroughly examine the costs and profit margins associated with travel money transactions and pushes providers hard for a cheaper and more transparent service for the customer."