He said choosing the wrong option could automatically add 10 per cent to what you should be paying
A travel expert has warned Brits going away that they are going to be ‘ripped off’ unless they make the right decision when paying for things on holiday. Simon Calder, who is a travel expert at the Telegraph, said it was essential that people going away paid for things in the local currency rather than pounds if they were using their credit card.
He said choosing the wrong option could automatically add 10 per cent to what you should be paying. It is something which catches out many travellers, with people unsure of which option to choose when given the choice between paying in pounds or the local currency.
Mr Calder explained why you should choose pounds, and why it can cost you if you choose the wrong option. He said: “Just at the start of the summer rush, I need to warn people about dynamic currency conversion.
“You’re in a foreign country, you’ve got your credit card, you come to pay, the shop assistant, the waiter says, ‘Okay, here’s the card terminal and look, do you want to pay in Euros or in good old British pounds?’
“And you might be tempted for thinking, ‘Well, I’ll pay in Sterling of course, then I’ll know how much it costs’. The one thing you will know is that you are going to be ripped off to the tune of typically 10 per cent.
“So, on a £20 lunch, you pay an extra £2, which you will never get back. Leave it for the waiter instead. So, just remember, paying by credit card, always pay in local currency.”
Withdrawing money abroad
The dynamic currency conversion (DCC) that Mr Calder is warning people about is also a topic money-saving expert Martin Lewis has discussed. However, he used a similar example at ATMs, urging people to use the local currency when abroad.
He said that when an ATM or card terminal enquires whether you wish to pay in pounds or euros, it is essentially asking you who should perform the currency conversion.
“If it’s euros, do you want your card company to do the conversion? If it’s pounds, we will do the conversion for you and then charge your card,” Martin said.
According to consumer group Which?, DCC permits foreign retailers and ATM operators to convert a transaction into pounds at the point of sale, yet the exchange rates on offer are frequently far worse than those provided by banks and card issuers.
Mr Lewis even warned that ATMs abroad often try to convince the individual to use pounds due to the unfavourable exchange rate and even added withdrawal fees.
“I want euros, please. Are you sure? We won’t do the conversion. Are you absolutely sure? Yes, I want euros,” he said. “The ATM… they are desperate to persuade you to let them do the conversion because they make a lot of money from it.”
































