Byline: SEAN POULTER
BANKS were accused last night of milking holidaymakers and business travellers to the tune of [pounds sterling]500million a year.
The cash comes from hidden charges on the use of credit and debit cards abroad.
They are added each time a card is used to make a purchase or withdraw cash, giving customers a nasty shock when they return home. In some cases, a family putting little more than [pounds sterling]1,000 on plastic can pay an extra [pounds sterling]81.
The main charge is a currency conversion fee which typically amounts to 2.75 per cent of the price of everything bought with cards, from meals and souvenirs to hotel bills.
Rather than detailing the amount on statements, many banks hide it in the conversion calculation.
Then there are the extra charges for withdrawals from cash machines. On a credit card the typical fee for a [pounds sterling]100 withdrawal is [pounds sterling]4.75 - 2.75 per cent in currency conversion plus another 2 per cent for using the machine.
The debit card equivalent is normally [pounds sterling]4.25 per [pounds sterling]100 - 2.75 per cent for conversion plus 1.5 per cent for using the ATM.
Some banks also add yet another fee each time a debit card is used for a purchase abroad. Halifax and NatWest impose a flat-rate charge of up to [pounds sterling]1.50 while Barclays charges an additional 1.5 per cent.
Last night the holiday charges were branded 'naked greed' by Eddy Weatherill of the customer lobby group the Independent Banking Advisory Service.
He said: 'These charges are not clear, not fair and it is about time they stopped.
'It is expensive enough already to use a credit card, given the extortionate interest rates imposed, but the banks use every trick in the book to squeeze more from customers. If that wasn't bad enough, many of them hide the charges away.' The Nationwide Building Society, which does not impose the same fees, called on others to play fair.
Chief executive Philip Williamson said: 'Our customers can use their cards on holiday without worrying about overseas usage fees. …