Consumers are being warned about the hidden costs involved in using a credit card abroad, according to a price comparison website.

Research from moneysupermarket.com revealed that up to £335 million is likely to be incurred in credit card charges abroad this year as consumers are unsure of the possible charges on spending overseas.

A recent Court of Appeal ruling on the Consumer Credit Act allows shoppers to claim against a lender if a purchase made in a foreign country is unsatisfactory or faulty, making spending abroad seem more attractive, convenient and secure.

However, moneysupermarket.com is warning borrowers to beware of the hidden pitfalls of paying overseas retailers with UK credit cards.

Consumers are advised to watch out for the foreign currency charge (usually 2.75 per cent on all overseas purchases), ATM withdrawal fees (£2 or two per cent), a higher interest rate on cash withdrawals, no 'interest free' period on taking cash out and dynamic currency conversion.

Dynamic currency conversion is where retailers convert the price of goods due to be paid for from domestic (eg euros) to pounds at their own conversion rate.

Robert Kenley, of moneysupermarket.com, said "It is important to remember that your day-to-day credit card may not offer the lowest fees when used abroad, so before heading off it is worth investing the time to check this out - where it doesn’t offer the greatest deal, consider switching to a card that doesn't charge fees or provides rewards for spending."