MILLIONS of shoppers are facing extra charges when buying from EU websites.
Mastercard and Visa have increased so-called interchange fees for online credit and debit cards for UK to EU transactions.
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Cross-border fees increased from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit card transactions.
On a credit card payment worth £100, the fee would rise from £1.20 to £1.50, while for debit cards it would go up from 20p to £1.15.
The fees are charged to retailers and many fear they will be passed onto shoppers.
But today, MPs have called on the payment giants to justify why they’ve hiked fees as much as SIXFOLD.
There’s also fear among MP’s in Westminster that this may lead to more expensive goods abroad so that retailers can make up for the increased fees they have to pay when accepting foreign payments.
Since Brexit, UK-issued Visa and Mastercard fees are no longer limited to the European Economic Area established levels of 0.2-0.3%.
That means card processing firms can up their fees.
It’s important to note that retailers aren’t charged cross-border fees when UK tourists shop abroad and present their card at local payment terminals.
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And it doesn’t matter whether that payment is made through chip and pin, contactless or swipe.
How to avoid charges when spending abroad
If you like shopping online, using a credit card that doesn’t charge a cross-border retailer fee like American Express cards may be a better option – but look out for any other transaction fees.
Using PayPal to make purchases at foreign merchants online will also have lower cross-border retailer fees at 0.5%.
However, remember if you were to use PayPal you may lose out on valuable Section 75 refund protections offered by your credit card company.
There are also a number of way to beat local charges tourists face when abroad.
Most standard bank accounts will charge you every time you tap your plastic in a different country so do your research and get yourself a fee-free debit card for abroad.
Chase, Starling Bank and Virgin Money are safe options. None of these cards have fees for spending or charges for withdrawing cash from an ATM when you’re overseas.
While the above debit cards are fee-free – the banks usually set daily limits on how much you can withdraw at ATM’s. So read the T&Cs.
If you prefer to use a credit card and want the added Section 75 protection – Barclaycard Rewards and Halifax Clarity also charge no spending fees abroad.
And never pay in pounds – always pay in the local currency whether you’re at a restaurant or ATM. This is because if you choose pounds, the retailer does the currency conversion and these rates are often poor compared with letting your card do it.
