14 June 2016

Don’t let card and mobile fees spoil your holiday

A pile of dirty washing is a price worth paying for a relaxing holiday in the sun, but coming home to a huge card or phone bill is quite a different matter.

But don’t despair, there’s no need to give up on your plans just yet; read on to discover the common myths about overseas spending – and how you can avoid them.

Cut card costs

In 2014, 80% of UK card purchases were made using debit cards, but transactions made overseas were more evenly split with 51% made on credit and charge cards, according to The UK Cards Association.

Knowing the truth behind eight mobile and card fee myths should help you to reduce what you spend on fees and give you more to enjoy while on holiday.

Myth 1: ‘I can use my card normally abroad, with no extra charge.’

Answer: False.

There are four main types of card charges that you may find yourself paying abroad, says the Money Advice Service:

  1. Foreign usage fees. At the end of each day, what you’ve spent on your card will be converted from the local currency where you are to pounds. What you are charged will vary depending on the day’s exchange rate, but most credit or debit cards will also add another 3% on top of this.
  2. Cash withdrawal fees. You’ll usually be charged around 2.75%-3% every time you withdraw money abroad using a debit card, but it’s a good idea to check the fees that apply to your card with your own bank. Remember that the foreign usage fee will also be added on top.
  3. Credit card interest. Withdrawing £100 for a nice meal could end up costing you another £9 in fees if you use your credit card! This is because, unlike at home, you’ll have to pay interest when you use your credit card – even if you pay it off at the end of the month.
  4. Flat fees. Some cards will also charge a fixed fee of around £2 every time you use them.

If you have a Nationwide credit or debit card, find out more about the fees that might apply when making a foreign purchase or withdrawing money.

Myth 2: Pay in pounds, if given the option.

Answer: False.

It’s usually best to pay in the local currency as exchange rates offered by retailers don’t tend to be as competitive.

Myth 3: ‘I don’t need to do anything before using my credit or debit card abroad.’

Answer: False.

It won’t help you save on card fees, but making a quick call to your bank before you go abroad could prevent it from being suddenly cut off. Tell your card provider where you’re going and when, so that they don’t think it’s been stolen when you start using it hundreds of miles from home. If you’re registered for Nationwide internet banking, you can simply enter the details on the ‘travel notifications’ page.

Decrease device charges
You may be delighted by the prospect of a week or two without your phone, but if you need to stay connected there are steps you can take to reduce the costs. After all, it’s very easy to rack up an enormous bill on your smartphone or tablet without even realising it.

Myth 4: ‘If I don’t use my phone or tablet abroad, I won’t get charged.’

Answer: False.

Most 3G/4G-enabled smartphones and tablets will download the latest versions of apps and system software when a connection is available. Turn off data roaming before you leave to avoid expensive data charges. You can still use Wi-Fi, when it’s available, to check your account balance.

Myth 5: ‘My standard phone package will cover me abroad.’

Answer: False.

You will usually be charged on top of your usual contract for calls, texts and using the internet abroad. The good news is that, within the EU, maximum tariffs for calls, texts and downloading currently apply and data roaming charges are to be scrapped entirely from June 2017. From 30 April 2016, mobile charges will reduce to lower, temporary tariffs.

Myth 6: ‘My device will automatically turn off data roaming, so I only need to worry about calls and texts.’

Answer: Sometimes true.

Some iPhones automatically disable data roaming when you go abroad, but it’s best to manually switch it off before you leave so that your phone doesn’t automatically download emails and updates when you arrive. On an Apple device, go to Settings/Mobile Data/Data Roaming, or Settings/More networks/Mobile networks on an Android phone or tablet.

Myth 7: ‘If I do need to use the internet when Wi-Fi isn’t available, there’s no way to control how much it will cost.’

Answer: False.

If you do need to use data on the move, you could think about getting a data bundle or ‘bolt on’, where you pay a fixed amount for additional data. This can usually be capped so that you can control your usage. You could also switch SIM card to avoid high roaming charges. You may need to get your phone unlocked, or use an old handset, as many smartphones are now locked to their network.

Most providers will notify you when you’re nearing your data limit or likely to be charged extra. Check the details with your phone company before you go.

Myth 8: ‘I’ll have to use paper maps while I’m away as looking at them on my phone will be too expensive.’

Answer: False.

You can download maps that you’re likely to need in advance using apps like Google Maps.

Find out more about Nationwide’s credit and debit cards.

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