This important question can easily cost holidaymakers extra cash
People going on holiday this summer should know this simple money mistake to avoid as it could needlessly cost you more without realising. The ‘rule’ to remember is very simple, according to money and travel experts.
Travel specialist Kate Donnelly (@Thedonelleyedit) claims that all British people heading abroad this summer should remember one important thing that could result in hidden fees when on holiday. She said that we all have the option to avoid these, even if the choice seems clear and convenient.
She said: “When you are abroad, you should always pay in the local currency. Whether that’s euros or dollars, depending on where you are, and you should never select the option of paying in Great British Pound (GBP).”
Why does it matter what you choose?
Whether you’re buying a meal or using a cash machine, you should always have the option to pay in local currency instead of DCC. Nobody should choose on your behalf.
Kate confirmed: “When you’re abroad, and you choose to pay in pounds, you are allowing the ATM or the shop to do the exchange. Within this, there will also be a conversion charge, which is notoriously a really poor rate, meaning you will end up paying significantly more if you pay in the local currency.
“It’s your bank or the card provider that does the exchange. Even if they add on a transaction fee, you are still going to be getting a better rate if you choose to pay in pounds.”
Choosing dynamic currency conversion (DCC) means the amount is converted from the local currency to pounds at the point of sale. But, “DCC usually costs you more”, according to HSBC.
The bank said: “You might choose DCC and pay in pounds because it’s a currency you’re more familiar with. It could give you a better understanding of how much you’re spending. But there are extra fees, and the exchange rate is usually higher.”
Kate added: “The best thing to do when going on holiday is to invest in a fee-free card, such as a Monzo or a Starling. They add no transaction fees, and they also offer the best exchange rate.”
Martin Lewis previously appeared on ITV’s This Morning to talk about this exact issue. He said that the best thing to do, wherever you are in the world, is to pay in local currency to avoid inflated fees.
