Did you know? Brits are overspending abroad, without even realising it. Picture this: you’re sipping sangria in Spain, buying souvenirs in Santorini, or tapping your card in Tokyo. But what if that quick tap is quietly costing you far more than you thought?
Our latest research has uncovered a sneaky trap that nearly half of UK holidaymakers are falling into. One that could be draining your holiday fund every single day.
The pricey payment mistake 47% of us make abroad
Here’s the big one: 47% of Brits choose to pay in pounds when offered the option, rather than the local currency. It might feel like the familiar and safe choice, but it’s actually the more expensive one, thanks to something called Dynamic Currency Conversion (DCC).
DCC happens when a shop, restaurant or ATM abroad offers to convert your payment into pounds. While it sounds helpful, it usually includes a markup of up to 18% on the actual exchange rate.
In other words, you’re paying more just to see the price in pounds.
Budgeting woes and declined cards
It’s not just DCC catching people out. We found that holiday money management is a bit of a minefield for many travellers:
- 54% worry about card security abroad
- 50% feel like they’re losing money when exchanging currency
- 42% admit to running out of spending money
- 37% don’t compare exchange rates before converting
- 36% still use airport exchange desks
- 36% have had their card declined while abroad
On top of that, two in five (41%) travellers say they find exchange rates confusing. No wonder so many of us feel financially off-balance when we’re overseas.
A hidden drain on your holiday budget
With fewer than one in three travellers (27%) using cash as their main payment method abroad, card spending has become the norm. But here’s the problem: if you’re using your everyday debit or credit card, you could be quietly racking up fees every time you buy a gelato or book a boat trip.
UK travellers are collectively losing over £26 million every single day to foreign exchange fees. These fees could easily be avoided with the right card or approach.
How? That figure comes from the 39% who use their regular cards abroad, spending around £100 per day and making over half their purchases digitally. A standard 3% transaction fee might not sound like much, but it adds up fast, especially across the 35 million* UK adults who travel abroad each year.
Feeling financially vulnerable abroad? You’re not alone
“From declined cards to confusing currencies, our research shows that a huge percentage of travellers feel financially vulnerable when heading abroad. And while insurance can’t protect you against bad exchange rates or payment errors, it does provide a vital safety net against other unforeseen issues, from a medical emergency to travel delays,” says Letitia Smith, Head of Communications at InsureandGo.
Letitia adds: “Before your next trip, it’s worth considering downloading a holiday spending app, as well as doing some research on which banks offer cards designed for spending abroad, so you’re not caught out by hidden transaction fees or costly exchange rates.”
Smart spending starts with good planning
Being travel-savvy doesn’t just mean packing the right plug adaptor or remembering your passport. It also means knowing how to pay smart. Whether it’s picking a card built for foreign travel or budgeting with a little more wiggle room, small changes can save you big money abroad.
And while you’re sorting out the financial side, don’t forget to get your travel insurance sorted too. From lost luggage to unexpected hiccups, InsureandGo is here to keep your holiday on track.
Methodology
InsureandGo surveyed 1,500 UK residents aged 18+ who travel abroad, conducted in July 2025 by survey provider 3Gem. Respondents answered questions about their payment habits, financial planning, and experiences abroad. Generational, regional, and behavioural splits were analysed.
Foreign exchange fee loss estimates are based on survey averages of card use and daily spend among those who use their regular debit or credit card abroad, assuming a 3% FX fee (source).
*According to ONS estimates of 42 million adults in the UK, of which 84% travel every year according to ABTA.
Data correct as of August 2025.