Record numbers of Brits swap cards for cash to curb summer spending

£10.2 billion in foreign currency set to be taken abroad

Date: July 03, 2009

• A quarter (25%) set to leave credit cards at home to avoid costly fees
• 85% admit not understanding how credit card charges work abroad
• Six out of ten believe they can budget more effectively using cash
• Over a third (40%) save up to £100 by switching from credit cards to cash

Record numbers of holiday-makers are carrying more cash and cutting back on credit card usage, according to leading foreign exchange specialist Travelex.co.uk.

Travelex’s quarterly market report of over 3,000 holiday-makers reveals that a quarter of holiday-makers (25%) will be ditching costly credit cards and opting for using cash abroad, in order to reduce their holiday spend and avoid being caught out by high overseas credit card charges. Travelex estimates that £10.2 billion of currency will be taken abroad this year, as a result of this change in spending behaviour, with the average holiday cash spend increasing to £400.

According to Travelex.co.uk, since the onset of recession, credit card spending abroad has dropped by nearly a fifth (17%). Approaching half (41%) of holiday-makers predict they will save on average £100 per trip, by ditching credit cards in favour of cash, and one in ten (13%) are set to save up to a massive £300 per trip. APACS, the payments association, has also recently reported a 3% drop in credit card spending in the UK, as Brits aim to better manage their reliance on credit cards.

Nearly two thirds of holiday-makers (61%) stated they could stay within their planned holiday budget more effectively with cash over credit cards. Pre-paid currency cards such as the Travelex Cash Passport are also growing in popularity, especially for travellers who enjoy the convenience and security aspects of plastic, without the danger of over-spending. The advantages of a pre-paid card over credit cards include the ability to lock in the exchange rate on the day of currency purchase, as well eliminating the risk of fraud or card cloning as pre-paid cards are not linked to any personal bank details.

The majority of holiday-makers are also in the dark by how much spending on credit cards abroad actually adds to their total holiday bill. A staggering 85% of respondents expressed concern over charges for using debit and credit cards overseas, but more than two thirds (68%) admitted to not realising exactly how much extra this added to their total holiday spend. Worryingly, one in ten (11%) admitted to relying on credit cards abroad as it simply ‘didn’t feel like spending’.

The results come at a time when Nationwide has scrapped its promise of fee-free foreign transactions on its debit and credit cards. Another major card provider, Egg has also announced plans to up its ATM withdrawal fees, from 28th May, from £3 to £5 or 3%, dependent on which is greater.

In response to the findings, Travelex has lowered its commission structure at its airport shops across the country, to allow holiday-makers travelling to the Euro-zone 0% commission on purchases of €300 and more, in time for the busy May Bank Holiday weekend.* With many families heading away to the Euro-zone for the last week of May, they can be assured of a good deal by taking cash before they leave and not get stung by hidden charges and fees on overseas use of credit and debit cards. Travelex.co.uk also offers commission free currency on over 70 currencies, meaning that wherever travellers are heading to, they can benefit from commission free currency, ready to pick up at airport or delivered to their home and knowing exactly how much they have to spend while away.

Julian Neal, Global Marketing Director, Consumer Business Unit, Travelex said, ‘Holiday-makers are doing a great job at combating the recession by increasingly opting for cash and ensuring they keep to a budget. However, if holiday- makers rely on using credit cards abroad they could get caught out by the confusing charges and fee structure. Our advice would be to avoid using a credit or debit card especially for smaller payments, to prevent those additional fees and charges clocking up over the course of the holiday. By switching to cash or using a pre-paid card such as a Travelex Cash Passport, holiday-makers can better control their spending and get the maximum value from their travel money.’

“Travelex.co.uk’s Price Promise guarantee will also help budget conscious holiday-makers, as we offer customers commission-free currency at the best exchange rate or we will refund the difference.”

For best price foreign exchange or to track currency rates, visit www.travelex.co.uk

Ends

Notes To Editors
*Travelex has also introduced 0% commission on purchases of $400 at BAA airport locations.

For more information or to arrange an interview with a Travelex spokesperson or case study, please contact:

Hannah Shanks
Talk PR
020 7544 3616
Hannah.shanks@talkpr.com

Kat McGettigan
Talk PR
020 7544 3804
Kat.mcgettigan@talkpr.com

About Travelex
Travelex is the world's largest foreign exchange specialist with over 700 retail branches in more than 20 countries, at key airport, seaport, rail and tourist locations. Over 40% of travellers - 1.7 billion passengers a year - pass through airports where Travelex operates including the major gateways at Amsterdam, Beijing, Frankfurt, Hong Kong, London, Mumbai, New York, Rome, Sydney & Tokyo. Every hour, Travelex provides foreign currency to more than 2,000 customers.

About Travelex Cash Passport
The Pre Paid Card combines the security of traveller’s cheques with the convenience of a card. Simply pre-load your Cash Passport with foreign currency to withdraw spending money at ATMs worldwide or to pay in retailers abroad. The card is pin and signature protected and local currency can be withdrawn from over 1 million Visa ATM’s worldwide or use it in retailers.

About Travelex Price Promise Guarantee

Travelex.co.uk has a Price Promise. Every day we monitor the exchange rates of the leading High Street and online providers, including the Travel Agencies and the Post Office to ensure we offer customers the best exchange rates. The Travelex.co.uk Price Promise guarantees customers the best deal on their currency – or we will refund the difference.