News & views

20 October 2009

Half term travellers risk holiday cash hangover

• UK Holidaymakers waste £326 million on overseas debit and credit card cash withdrawals

With half term holidays just around the corner new research from First Rate Exchange Services has revealed that less than half (48 per cent) of UK holidaymakers calculate how much cash they will need for their for overseas holiday spend, resulting in many paying far more for their holiday money through costly cash withdrawals from ATMs whilst overseas.

With ATM usage and commission fees¹ costing around £6 for credit card cash withdrawals, and £5 for debit cards² when withdrawing the average transaction of £108 in foreign currency, just a few withdrawals across the course of a holiday can result in a significant increase in spend. So its perhaps not surprising that almost a third of travellers (32 per cent) stated that failing to budget correctly had resulted in overspend, and a financial holiday hangover that lasted well beyond the fight home. 

In fact last year over £7.8bn was withdrawn from ATM’s overseas by UK travellers resulting in an estimated £326 million³ being spent on commission and cash advance fees alone.

When it comes to holiday cash calculations the Welsh are the most likely to set a budget on how much they’ll need – this pre-planning obviously pays off as only two per cent of people from Wales say they usually spend far more than they’d hoped.

People in the North West are most likely to just hope they have sufficient cash – only 36 per cent estimate how much they’ll need before they depart.  So it’s probably no surprise that almost half (45 per cent) of people from the region spend more than they thought they would while away.

However, it’s Londoners who are most likely to have to pay more to withdraw their cash overseas – more than one in five (22 per cent) do not take any cash with them at all.

When it comes to being canny with cash, holiday makers in the North East are most likely to shop around for the best rates, almost two thirds (62 per cent) said they’d do their homework and seek out the best deals on offer.

Gordon Gourlay, First Rate Exchange Services said: “Millions of half term holidaymakers may be running the risk of paying high commission charges by waiting to get their holiday cash from ATMs overseas.

Good value and convenience remain the drivers for holiday makers when picking up their cash, with opportunities still existing for many retailers providing essentials, from swimwear to travel insurance to add an in store or online currency service to their current service range.”

First Rate Exchange Services is the UK’s leading provider of foreign exchange services to foreign currency retailers.  It provides a wide range of white labelled foreign exchange services available to businesses large and small across the UK. 

Notes to Editors:

All statistics (unless stated tbc) from survey of 783 UK holidaymakers who travelled in August 2009.  Undertaken for First Rate by YouGov September 2009.

¹ Different card providers have different terms for different charges. These include: Overseas ATM charge; cross border transaction fee; loading fee; commission; cash advance. But regardless of what they call the fees, they typically charge two of the above fees.

² Average credit card charge on £108 is £6.21 in and for debit cards £5.13 (FRES Research April 2009).

³ APCS UK Payment Statistics July 2009 show overseas cash withdrawals total £7.8 bn. Estimated that 62m debit cards and 7m credit card withdrawals per year, plus 3m ATM card transactions.  Figure includes estimate of number of non-fee charging cards used overseas.

About First Rate Foreign Exchange Services:

First Rate is the UK’s leading provider of foreign currency services supplying over 11,500 retail outlets with a foreign currency service. It is the UK’s biggest foreign currency notes supplier and Europe’s major provider of traveller’s cheques and in the top five globally. First Rate sources currency through its associate business unit Bank of Ireland First Currency Services, one of the world’s leading wholesale currency operations.

First Rate can provide UK retailers and businesses with the following foreign currency services:

• Travel Money Online – a service enabling the ordering of foreign currency notes and traveller’s cheques securely via First Rate’s white label internet application
• Bulk provision of currency for currency retailers
• End-to-end consumer order processing – totally outsourced, white label currency solutions for phone, internet or retail outlet order placement

To find out more visit www.firstrate.co.uk.

For further information, please contact:

Four Countries Communications
Ruth Barker
Tel: 0207 749 9219
Mobile: 07814 571128
Email: ruth@fourcountries.co.uk

Bank of Ireland UK Financial Services
Sandra Grandison
Tel: 0203 201 6509
Mobile: 07912 298013
Email: sandra.grandison@boiuk.com

First Rate Exchange Services Ltd is registered in the UK and Supervised by HM Revenue & Customs for Money Service Business (MSB): License number 12133160. First Rate is a joint venture between The Governor and Company of the Bank of Ireland (Registered in Ireland and passported into the UK for regulatory purposes) and the Post Office^® Ltd. The Bank of Ireland is authorised by the Irish Financial Regulator and the Financial Services Authority for the conduct of business in the UK. Bank of Ireland First Currency Services is a division of The Governor and Company of the Bank of Ireland.