£125 MILLION LOST IN FOREIGN ATM TRANSACTION FEES
Put your bank cards down and step away from the cash machine.
Our unplanned ATM withdrawals are costing us a lot more than we think.
At home, many of us have almost forgotten what it’s like to have wallets full of coins and notes, happy as we are apple-paying and contactless-card-tapping our way through our day-to-day lives.
But when it comes to travel, it’s a different story.
According to the latest stats, having the comfort of cold, hard cash in our pockets on holiday is still a pretty big deal - at least 75% of travellers arrange some form of travel cash for their holiday. And one of our favourite ways to get it is to withdraw it from an ATM with our bank cards when we get there.
The problem: if we’re not careful, it’s possible to be charged up to 4 separate times - for one. single. withdrawal with our bank cards overseas. Yikes!
Dissatisfaction with the fees charged by most bank cards at overseas ATMs is one of the reasons why we've worked so hard to keep ours as low as possible, and why any ATM withdrawals over £200 are completely free with your WeSwap card - something you don't get with any other travel card. But unfortunately the card you use is just one factor.
So - we took a deeper dive into the data, surveying over 2,000 Brits nationally, to discover more about our ATM habits, what it might be costing us, and, most importantly, how to avoid them, so we can all withdraw overseas stress-free.
|31% of UK holidaymakers - just over 14 million Brits - withdraw cash for their holidays when they arrive.||Totting up average bank card charges, this means a whopping £125m is charged to UK holidaymakers in foreign transaction fees|
|77% of travellers withdraw from an ATM because they under-budgeted, typically by around £100||60% of travellers over-withdraw, coming home with an average excess of aroung £87.|
Let's break it down.
UK debit cards deduct up to around 3 % in non-sterling transaction fees, in addition to a 2 % overseas ATM fee.
With 31% of us – just over 14 million brits nationally - taking out an average £169.78 upon arrival, we take out a staggering £2.5 billion in holiday cash every year. Taking into account those fees, UK residents going abroad get charged a colossal £125 million in ATM fees.
Now, £125 million is certainly a lot, but we think this only scratches the surface.
What’s almost impossible to estimate is the cost of any fees from the ATM itself, or money lost through Dynamic Currency Conversion; a common practice where the ATM marks up the rate again at a cost to the consumer. We’ve broken the four charges and what they look like here, and you can read more about DCC here.
So the true cost is likely to be even higher than £125million. That's a lot of ice cream!
Lots of last minute cash withdrawals are because we under budget how much cash we really need.
77% of travellers who take money out abroad - 10.2 million people nationally - take out last minute cash-withdrawals when they're away on holiday. On average, they under-budget by around £100.
Londoners and those in the South West under budget by the most, withdrawing an emergency £140.83 and £125.52 respectively. Those in Scotland are a little better, only withdrawing £70 or so.
On the flip side, 60% of travellers - 27.1 million – over-withdraw cash, coming home with roughly an excess of £87. This equates to £2.3bn of excess currency returning home UNUSED.
Either way, it seems our slightly poor budgeting skills, along with the convenience of withdrawing cash on arrival, is resulting in sky-high fees.
So how can you avoid all this? As Francis Bacon once said, “knowledge is power”. In this case, we’d say “a bit of planning” is pretty powerful, too.
Jared Jesner, CEO and founder of WeSwap, gives the following tips:
“Taking cash out when we arrive is an increasingly popular way of getting our holiday money – and done carefully it can be a good move. But many holidaymakers do so unaware of some of the potential charges involved, like DCC. Planning is always key to getting the best value for money - choose the right card before you go, be careful which ATMs you use abroad, withdraw larger amounts less often and always say no if a machine offers a conversion. It pays to prepare, and now it takes little to no time to do so!"
To make sure you always avoid these DCC fees test out your skills with our quiz.