Britons ‘risking extra charges’

Britons are at risk of piling up extra charges on credit cards when they use them overseas purely through not reading the small print.

Britons are at risk of adding to their credit card debt by failing to read the small print on their terms and conditions.

A study by MoneySupermarket.com has revealed many consumers are not aware of some features of their card that, were they area of it, might change how they use their cards.

An example of this is that 54 per cent do not know that immediate interest is applied when they use a card to draw out cash from an overseas ATM. 

Those aware of this may be less likely to incur extra interest and charges through such use and will either use the card itself or find other ways of getting cash – like travellers cheques.

Other aspects many were unaware of include the fact that an overseas transaction will be charged according to the card company's own conversion rate, something 41 per cent do not know.

Travel expert at the site Bob Atkinson said: "It's extremely worrying that such a high number of holidaymakers are not aware of the extra fees or charges that apply when using a card for purchases or withdrawals, or that they may not be getting the best exchange rate."

He added that consumers should check these issues before heading overseas, noting that those who do not may "face a hefty bill on the doormat on your return when in fact you thought you had snared a bargain".

Mr Atkinson also said people should never allow retailers to carry out dynamic currency conversion, where the transaction is converted into sterling at the point of sale – as this carries unfavourable exchange rates.

Personal debt levels in the UK have been falling or static in recent years, but Finance and Leasing Association figures for April showed borrowing among its members was nine per cent more than in the same month in 2011, with credit card and loan debt among those that have risen.

Posted by Paul Thacker