Consumer alert: Charges when abroad

People with debt problems could become worse off thanks to getting charged each time pre-paid currency cards are used to make withdrawals abroad.

A study by Sainsbury's Finance found that 72 per cent of consumers say they incurred an individual charge when using their cards overseas.

With these charges taking place on £3.87 billion worth of foreign money over the last 12 months, many UK consumers could have to use an IVA to relief their debt issues.

Sainsbury's Finance says many travellers don’t realise how much these charges add up to – because withdrawals of a smaller amount are usually charged at a higher rate.

Kevin Still of Atlantic Financial Management, said: "Sainsbury’s study is yet another wake up call for UK consumers facing reductions in disposable income - that they need to look at all aspects of their budget."

He added that expenditure shocks can be the catalyst for a debt spiral.

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