Travel Money Debit Card Fees – What the changes mean to the average holidaymaker
Leading money saving website www.moneymaxim.co.uk offer their explanation on what the recent travel money debit card fee changes mean.
Charges made on travellers and holidaymakers by some banks when they buy foreign currency are being axed following pressure from the Office of Fair Trading (OFT).
The charges that they levy on debit card transactions, which can include a foreign transaction fee of around 3.0%, will now be clearly itemised on monthly statements.
The firms who have agreed to remove additional charges levied when purchases of foreign currency are made are Lloyds, Barclays, RBS, Santander and the Co-op, all of whom who currently make charges of between 1.5 and 2% if customers use their debit cards to buy currency in the UK before going on their trip. Nationwide, HSBC, First Direct and Halifax Bank of Scotland are not impacted as they do not charge these fees.
During their investigation the OFT identified that travel money companies made £1bn a year from such charges whilst Consumer Focus reckon the changes will trim £20m from this.
So what is the impact?
Currently the banks affected charge a 'penalty' to their customers who have the audacity to buy their currency from a exchange dealer, supermarket such as Tescos, store such as Marks and Spencer or Debenhams or alternative bank. As this fee is often in the region of 1.5% - 2% (normally though with a maximum charge of £4.50) which can means a ridiculous charge of £4.50 on a transaction of £225 or more.
That means that unless the exchange rate quoted is substantially better elsewhere often it’s easier to use your own bank and accept a substandard rate.
The changes will mean that it’s easier to compare rates and find the best deal without the worry of extra charges being levied.
Mark Bower, Managing Director of Moneymaxim said;
“For the big banks these fees are not just a money earner in their own right, but they create an impression in customer’s minds that it’s not worth shopping around. With such marked differences in the rates offered by both specialist moneybrokers and new entrants into the market like the supermarkets and those available from high street banks customers can make worthwhile savings on fairly modest sums.
“Until now often the only way to avoid the charges was to use a hole in the wall machine to withdraw cash which can then be used to buy the currency, but this left little option but to cough up if you wanted to buy online.
“It’s not even as if the banks 'cost structure' for offering foreign exchange services is that different from the specialists, as most sizable transactions through branches now require pre booking and are delivered to a local branch for collection, a very similar model to the home delivery service currency service offered elsewhere.”
The changes also will make services such as the order and collect service companies such as Moneycorp offer through Gatwick and Stansted airports much more attractive.'
About moneymaxim.co.uk: Launched in 2008 by Mark Bower moneymaxim.co.uk aims to deliver an impartial and independent service both online and through telephone money saving specialists. Moneymaxim is authorised and regulated by the Financial Services Authority (FRN: 496690). The website won The Best Niche Insurance Aggregator Award 2010 from The Money Awards.
Visit: www.moneymaxim.co.uk for more money saving advice and information.
Mark Bower, Managing Director of www.moneymaxim.co.uk is available for interview. For images and interviews contact Dale Lovell on 01753 859 588 / 0779 1414 681 or email: firstname.lastname@example.org for more information.