Credit card charges: UK consumers paid over £20m in fees for non-sterling online purchases last year

Norwich & Peterborough building society's research showed that 60 per cent of people don't realise they will incur additional charges

As shoppers gear up for a cyber Christmas, they need to be aware of the charges if they buy on the web in a foreign currency (Getty Images)

With Christmas just five weeks away, spending on the high street and the internet is starting to ramp up, but watch out for extra card charges if you make any online purchases in a foreign currency. Norwich & Peterborough building society issued this warning after its research showed consumers paid an estimated £20.7m in fees for items bought online last year.

People in the UK are increasingly savvy when it comes to the additional charges levied by most debit and credit cards when they spend or draw cash when holidaying overseas, but many don't realise that the same charges apply to online purchases in a foreign currency. The figures from Norwich & Peterborough show that 60 per cent of people don't realise they will incur additional charges for non-sterling purchases.

The card fees are not insignificant with a 2.99 per cent foreign currency charge commonplace, plus some banks with charge you £1 to £1.25 per debit card transaction on top, so that £200 gift may end up costing you an extra £7.23 and that's before postage.

Some cards will allow you make these purchases without being charged so it's worth considering keeping one in your wallet for these specific occasions. Some of the most competitive tariffs come from Access Prepaid, Revolut and Centtrip.

Debit cards offering the cheapest non-sterling spending include Norwich & Peterborough and Metro Bank, although you will need to maintain your current account with these providers to qualify for the debit card.

There are also credit cards that are free to use in these circumstances, including the popular all-round "Everyday Plus" card from MBNA or the Clarity card from the Halifax. Other credit cards with no charges on currency purchases include those from the Post Office, Nationwide building society (the Select card0 and Saga.

Challengers pushing up savings rates

Savings interest rates have slowly begun to pick up over the past few months, particularly with regards to fixed rate bonds.

Paragon Bank, Shawbrook Bank, Secure Trust Bank and Charter Savings Bank have been jostling for best-buy top spots, with the latter being the most consistent player for fixed rate savings deals this year. You may not yet be familiar with some of these names but they are fully regulated and offer the same level of Financial Savings Compensation Scheme (FSCS) protection as you would get from your high-street bank.

The best fixed savings rates at present include the 2.15 per cent AER 1 year and 2.35 per cent AER 18 month bonds from Shawbrook Bank; alternatively you can earn 2.55 per cent AER with Charter Savings Bank if you are comfortable with a longer term three-year lock in.

The recent competition has seen some beter deals appearing for those who want to stick with an FSCS protected provider, even though the level of protection is to be cut from £85,000 per person per authorised provider to £75,000 per person from next January.

If you're prepared to take a calculated risk to secure a far higher interest rate, retail-focused peer-to-peer firms Lending Works, Zopa and RateSetter are worthy of closer inspection.

Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.uk