Skip navigation

London 1st July 2008: Research launched today by Travelex reveals consumers are still relying on credit and debit cards abroad, last month Brits risked £58 million in extra charges at ATMs and in retail outlets abroad. This is the equivalent of sending 20,000 families of four on a week-long holiday to the Med.

Last year Britons used their cards for overseas transactions totaling £25.2 billion - £18.1 billion on credit and debit card purchases and £7.1 billion on cash taken out of overseas cash machines . The Travelex research shows in the last month alone 20% of holiday makers used credit or debit cards in retailers abroad as their main source of travel money, incurring charges in the region of 2.75% totaling £43.6 million; and 26% of consumers relied on withdrawing local currency at ATMs where a overseas fee of 1.5% charge incur charges worth £14.4 million.

Martin Bamford, personal finance expert and best-selling author said: “The results shows even in tough economic times, consumers are not being smart with their money when travelling abroad. For each of these transactions consumers are risking uncompetitive and fluctuating exchange rates and overseas charges. Whilst many would see using credit and debit cards as a way to spread finances and have easy access to money, the charges they incur will actually cost them more money in the long run.”

The Travelex research showed men are more likely to use cards than women with almost half (45%) of men using cards abroad compared to just over a third of women (36%). Nearly half of all 18-24 year olds (49%) will use foreign cash purchased pre-trip, whereas the least likely to use cash are the 25-34 year olds and the 55+ (39%).

The research also shows the number of people using travellers cheques as their main source of travel money has decreased by more than a half in the past month compared to the last six to 12 months (12% to 5%) although the purchasing of foreign banknotes on the UK High Street remains the most popular foreign exchange product (42%).

Stephen O’Donovan, Regional Director, Travelex said: “Pre-trip foreign exchange is almost always a better deal that arranging it when you arrive. We recommend people research rates and lock-in favourable ones on products such as our commission free prepaid currency card. Despite the fact that the Euro is stronger than a year ago, two thirds of people travelling to Europe have not planned to counter the impact this will have on their holiday budget . It means that they are more likely to run out of spending money before the end of their holiday and then be forced to use more expensive channels, like overseas ATMs, to fill the shortfall. For a happy holiday and to return debt free, planning really is the key.”

Kerrie Laird, who has been planning a holiday to Rimini with girlfriends in July, said: “I spent a long weekend in Rimini last year for my hen do and really wanted to go back for a slightly longer holiday. I relied mainly on using my credit and debit cards last year but came home to much larger charges than I had expected. This year I’m planning to budget my spending money with 80% on a Euro Cash Passport and 20% in notes bought from my local High Street, where I’ve noticed some really competitive rates. I also feel more secure knowing that if I did lose my wallet or the ATM ate my card, I wouldn’t be stranded without funds as Travelex will replace my Cash Passport balance in 20 minutes.”

Top five tips for being smarter with your money abroad:

1. Know your budget – research the average cost per day of your holiday to set a realistic budget

France could see you become a tea-totaller with a pint costing a frightening £6. But head to Indonesia and that beer will cost you only £1.54.

In New York, a bed (3*) can cost you a whopping £325, yet in Malaysia the equivalent is a mere £50

2. Get the most for your money – buy before you fly. Lock in a more favourable rate in the UK before you go and minimise overseas card charges

Most (43%) of travellers buy their foreign exchange two weeks before they depart

3. Don’t get caught short – You’ll get less Euros this year than last but more US Dollars for your Pound so be prepared to alter your budget to reflect currency fluctuations

4. Be secure – with ID theft and fraud on the rise, protect yourself with products that don’t make personal details visible and avoid links to your bank account with product such as Cash Passport

Over 60% of travellers fear credit or debit card cloning while abroad

5. Ensure your holiday can continue even if your wallet is lost or stolen abroad.

Foreign Banknotes are unlikely to be insured while replacement of cash or cards can take weeks and require payment of hefty international delivery fees. All products supported by Travelex come with 24/7 Global Emergency Assistance including access to emergency cash in as little as 20 minutes.

6. Don’t lose leftover foreign currency – Most High Street retailers will offer free buyback for leftover currency or you can keep it on a prepaid currency card for your next trip

80% of travellers return with leftover currency and 85% plan to save it for their next trip, assuming they can remember where it’s stored


-END-

About Travelex:

Travelex is the world's foreign exchange and international payments specialist. Operating through subsidiaries and branches in five regions: the United Kingdom; Europe, Middle East and Africa (EMEA); Americas and Asia Pacific.

As one of the world's leading providers of outsourced travel money to banks, travel agencies and other retailers it provides products including its prepaid travel card Cash Passport to over three million channel customers annually. Through its world-leading automation Travelex offers consumers a full range of delivery channel options including telephone and web-based ordering.

www.travelex.com

www.cashpassport.com


Calculations:

The following figures assume the data supplied is based on a 12 month period between May 07 and May 08. For the purposes of this calculation, monthly figures have been averaged out and do not take into account seasonal adjustments in ATM usage.

………………………………………………………………………………………………………
During the 12 months from May 07 - May 08, £7,100,000,000 was taken out in cash from ATMs

Based on an ATM charge of 1.5% this equates to:

£106,500,000 in ATM charges per year

£8,875,000 in ATM charges per month (averaged out)
………………………………………………………………………………………………………
During the 12 months from May 07 – May 08, 16% of travelers used ATMs to withdraw cash

In the last month (June 08), this figure rose from 16% to 26%

This represents an increase of 62.5%.
………………………………………………………………………………………………………
Due to the 62.5% usage increase, the ATM charges have risen from £8,875,000 to £14,421,875 in the last month (June 08).

Should travellers continue to withdraw cash from ATMs at the increased rate of 26%, a total of £173,062,500 will be spent annually on ATM charges from June 08 – June 09
………………………………………………………………………………………………………
MATHS

£7,100,000,000 x 1.5% = £106,500,000 (annually)
£106,500,000 / 12 = £8,875,000 (monthly)
16 + 16x/100 = 26 hence x = 62.5

Or 62.5% x 16 = 10 and 16 + 10 = 26
£8,875,000 x 1.625 = £14,421,875 (monthly)
£14,421,875 x 12 = £173,062,500 (annually)

CREDIT CARD CHARGES

The following figures assume the data supplied is based on a 12 month period between May 07 and May 08. For the purposes of this calculation, monthly figures have been averaged out and do not take into account seasonal adjustments in Credit Card usage.
………………………………………………………………………………………………………
During the 12 months from May 07 - May 08, £18,100,000,000 was spent on Credit Cards

Based on Credit Card charges of 2.75% this equates to:

£497,750,000 in Credit Card charges per year
£41,479,167 in Credit Card charges per month (averaged out)
………………………………………………………………………………………………………
During the 12 months from May 07 – May 08, 19% of travellers used Credit Cards

In the last month (June 08), this figure rose from 19% to 20%

This represents an increase of 5.26%.
………………………………………………………………………………………………………
Due to the 5.26% usage increase, Credit Card charges have risen from £41,479,167 to £43,660,971 in the last month (June 08).

Should travellers continue to use Credit Cards at the increased rate of 20%, a total of £523,931,652 will be spent annually on Credit Card charges from June 08 – June 09

………………………………………………………………………………………………………


Lucy Sutton
Account Executive
Waggener Edstrom Worldwide
D - 44 20 7632 3853
M - 44 77 6525 3503
lsutton@waggeneredstrom.com
www.WaggenerEdstrom.com



Sabre Award Winners – Technology Consultancy of the Year 2008

This press release was distributed by ResponseSource Press Release Wire on behalf of Waggener Edstrom (UK) in the following categories: Personal Finance, Travel, for more information visit http://pressreleasewire.responsesource.com/about.