With many of us tightening our belts in the hope of affording a holiday or short break away, it would seem crazy to let that money go to waste by being stung with the hidden bank charges that can quickly mount up when you go abroad.
Thankfully if you’re an Irish citizen taking a holiday in France or Spain, or indeed any other euro zone country, the charges you face when you use your cash card or purchase an item with your debit card will be exactly the same as those you face at home. However, if you’re visiting non euro zone countries, including England, Scotland and Northern Ireland, then expenses could quickly add up.
How the big banks charge you
AIB charges a currency transaction fee outside the euro zone of up to three per cent, plus a commission of one per cent. This means that if you take out €100 from an ATM you will be hit with a charge of €4 each time. AIB does have separate charges for debit card purchases however, and at 1.75 per cent of the transaction they are significantly below the charges for cash machine withdrawals.
Moving on to Bank of Ireland, and at 1.75 per cent, its percentage charge for non-euro debit card purchases is the same as AIB, with a minimum charge of €0.46. However, its maximum charge could be as high as €11.43 for both non-euro cash withdrawals and debit card purchases. Indeed its non-euro cash withdrawal charge also surpasses that of AIB at 3.5 per cent – so you’ll be charged €3.50 for every €100 you withdraw. In the case of Ulster Bank and Permanent TSB, they both charge 3.5 per cent for non euro zone transactions, just like the Bank of Ireland. There is a charge of two per cent of the transaction value for a cash withdrawal, and there is a foreign exchange fee of 1.5 per cent. So if you went to the cash machine 10 times to withdraw €100 during your holiday you’d face a bill of €35 – but you could save by withdrawing €600 at one time as the maximum fee would kick in at this point.
Irrespective of which bank you’re with, be careful not to use credit cards to withdraw cash as this will incur a daily interest rate, which is usually much higher than the card’s normal interest rate. In fact it is the most expensive way to withdraw cash at home and abroad with cash advance fees potentially as high as 18.1 per cent.
Look for savings
It’s really important to familiarise yourself with the terms and conditions of your debit or credit card before you travel overseas. Cards can pay off for purchases abroad, particularly if you have a credit card with a zero per cent interest rate. However, you must be savvy in how you use your card and preferably take cash with you for small ticket items.