How to avoid travel the money card TRAPS

You’re stung for not using it enough, spending at weekends – and taking out cash. So here’s . . .

HOLIDAYMAKERS are being hit by rip-off fees if they try to lock in good exchange rates on travel money cards.

The pound is in turmoil after the shock election result last week, making holiday spending more expensive. It plunged 2 pc against the dollar when exit polls pointed towards a hung parliament — and there are fears that the uncertainty could push it lower still.

On Thursday evening, the pound fell to an eight-week low of $1.27. Against the euro it hit a seven-month low of €1.13.

The exchange rate is currently $1.27 and €1.14 to the pound.

One way for travellers to protect against further falls is to take out a pre-paid currency card.

You load them with cash then use them like debit cards to spend in shops or with-draw money from ATMs. One in ten holi-daymakers use these cards, according to Consumer Intelligence.

But some of the most popular deals con-tain catches that erode your spending money, Money Mail research found.

The fees can add so much to your costs that you may even be better off using some ordinary debit or credit cards.

Post Office, one of the most popular pro-viders, charges holidaymakers $2.50 (£1.96) or €2 (£1.76) for every cash withdrawal using its Travel Money Card. So if a family visited an ATM twice a day on a two-week holiday, it would cost them $70 (£55) or €56 (£49).

It also costs £5 to close the account. If you don’t, you will start paying a £2 a month maintenance charge one year after it expires.

The Revolut card — often touted as one of the best value options — also contains catches. It charges you the cheapest exchange rate available when you use the card. But it applies a mark-up if you spend at the weekend, when the currency mar-kets are closed.

It takes the exchange rate at midnight on Friday and adds 0.5pc to 1.5pc to the rate, depending on the currency, until 11.59 pm on Sunday. So a €200 family meal in Spain would cost an extra 83p at a weekend at current rates.

REVOLUT allows you to with-draw £200 a month without fees, but then applies a 2 pc charge, meaning it costs £2 to withdraw every £100 above that level.

It also charges £5 for standard delivery of its card and £12 for express delivery.

On ordinary debit and credit cards, banks typically charge around 3pc every time you spend and up to £4.50 for each cash withdrawal. But some debit cards and credit cards have no extra charges overseas, making them a cheaper option.

The halifax Clarity Mastercard credit card has no charges on worldwide spending.

Metro Bank offers free cash with-drawals and spending in europe on its debit and credit cards.

Virgin Money’s debit card offers fee-free spending worldwide, but each ATM withdrawal abroad costs £1.50. Virgin’s Travel Cred-it Card Mastercard and Nation- wide’s Select Credit Card, available to existing customers, are fee-free for overseas spending.

Personal finance expert Andrew hagger says: ‘If you’re a frequent traveller, pre-paid cards can offer a secure way of carrying holiday cash and are cheaper than most bank debit and credit cards. But they are by no means free, and can come with a whole raft of confusing charges.

‘One of the worst is the inactivity fee, which normally kicks in after 12 months of not using the card.’ FairFX charges an ‘administra-tion fee’ of up to $3 (£2.35) or €2.50 (£2.20) per month on expired cards which still have cash loaded on them. It also charges a £9.95 application fee when its card is first issued — unless you immediately load up at least £200. It then bills holidaymakers up to $2 (£1.57) or €1.50 (£1.32) for withdrawals from ATMs. It also costs at least £5 to withdraw cash over the counter in a bank and if you’re outside the U.S. and europe, there’s an extra 1.4 pc transaction fee.

So if a family spend £2,000 on a two-week trip to Australia with a FairFX card, it would cost £28 in transaction fees and another £6 if they made six cash withdrawals.

Travelex charges a £2 monthly maintenance fee after 12 months of not using your card. It also charges £3.95 to deliver your card if you load less than £300 or £1.95 under £500. If you use the card in a country with a different currency to the one loaded on to the card, you’re charged an extra 5.75 pc.

Unlike bank debit and credit cards, which usually use Mastercard or Visa’s exchange rates, pre-paid cards tend to use their own rates, which can vary.

A spokesman for FairFX says: ‘We work very hard to raise the profile of hidden and unfair charges in the currency markets so we are very transparent with any fees.’

Post Office says the majority of its fees for cash withdrawals cover the costs it is charged by overseas banks for this service.

Travelex says its delivery fees are some of the cheapest on the market and that people can get unspent cash off their card by withdrawing it at an ATM, cashing it in in-store or spending it on their next trip.

Revolut said its premium users, who pay £6.99 a month for free overseas medical insurance, can withdraw up to £400 a month from ATMs without charge.