Beware of card charges, holidaymakers warned

Personal finance advice organisation Moneyfacts has warned people who may be travelling abroad this year to beware of additional charges that may apply on credit and debit cards.

The organisation has pointed out that the boom in usage of credit and debit cards as opposed to older payment methods such as travellers' cheques may result in an increase in charges accrued by holidaymakers.

Most credit card companies apply charges to purchases and cash withdrawals made in foreign countries, although the charges differ depending on the firm itself.

A survey by Moneyfacts found that the Royal Bank of Scotland, The Co-operative Bank and Yorkshire Bank all charged a rate of 2.75 per cent for foreign usage of credit or debit cards.

"Taking cash out on your credit card is never advisable, as not only is the interest rate much higher than on purchases, but you will be charged the interest from day one. On top of this, you will be charged a cash handling fee as well as the foreign usage charge," the organisation warned.

According to the Association of British Travel Agents, Spain is still set to be the top package holiday destination for Britons in 2008, while honeymoon couples are choosing the Seychelles, Bali and the Maldives among their favourite countries to visit.