Five hidden charges to watch out for and avoid

Holly Thomas / 26 February 2016

Don't get caught out by hidden (and often unnecessary) charges with our guide to spotting and avoiding add-on fees.



Being on your guard for scams is a must in this day and age. But it’s not just conmen you need to watch out for. There are many companies poised to take our money in the form of hidden fees and charges – and it’s all above board.

Here are some of the charges to look out for and how to avoid them.

1. EHIC and ESTA

A European Health Insurance Card (EHIC) is an essential part of travel in the EU, providing cardholders free public healthcare.  Equally, if you are travelling to the US, you need to have applied for and paid for an ESTA. It takes only around 10 minutes and costs $14. However, the application itself is free.

There are online companies that have surfaced offering to complete the application on your behalf for a fee.  These are unnecessary and you don’t need to use them. 

Avoid that charge: Go straight to the official websites for the EHIC and ESTA.

Top five scams in the UK. 

2. Dynamic currency conversion

The companies and retailers behind a rip-off scheme that already costs British tourists close to £300 million a year have become even more aggressive in their pursuit of revenue. The practice in question is dynamic currency conversion (DCC).

This is the process whereby travellers are offered – or sometimes persuaded – to take the option of paying in sterling when making a card transaction abroad, whether it be paying for a hotel or a meal, or when withdrawing cash from an ATM. 

As you prepare to take out your money, you are asked to press “Yes” to pay in sterling or “No” to pay in euros, dollars or any local currency. Pressing the Yes button, and so taking the DCC option, means that you will pay a fee of as much as 4% on the amount of cash you have withdrawn. The same fee will be levied on a purchase. 

You will also almost certainly receive an inferior exchange rate set by the DCC service provider undertaking the transaction — and creaming off the profits.

Avoid that charge: Always opt to pay in local currency.

Read Paul Lewis' guide to spending money abroad. 

3. Mobile phone roaming charges

Roaming charges reportedly cost British travellers over an estimated £100 million last year. 

The good news is that members of the European Parliament voted to ban roaming charges from December 2015, as part of its wide-ranging telecoms reforms.

Avoid that charge: If in doubt, switch off roaming and only use the web when you have free wi-fi.

Is it safe to charge your phone overnight?

4. Compulsory tipping / automatically added service charge

Many restaurants and bars (especially hotel bars) take it upon themselves to automatically award a tip. British people are notoriously over-polite (most of the time!) and so don’t be shy about discussing any short-comings.

Avoid that charge: If you felt the service didn’t warrant the charge, then politely discuss it with someone.

Five things restaurants don't want you to know.

5. Hotels charging for wi-fi

Hotel chains say they charge for wi-fi because of the expense of providing the service, considering it more like room-service food than an inclusive service. 

The add-on charges for in-room internet services let hotels advertise a lower price and then boost per-night revenue by as much as 5% to 10%.

Coffee shops, airports, public buildings and even budget hotels have all succumbed to pressure to offer wi-fi connections free.

Avoid that charge: Don’t put up with charges – wander to a nearby coffee shop where you can surf the internet for free.

For more tips and useful information, browse our money articles.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.