Paying in sterling for foreign transactions might not save money, travellers have been advised.
Holidaymakers looking to save money by paying in pounds on overseas card purchases often end up losing out anyway as a result of their choice of payment, Abbey pointed out today.
Many UK holidaymakers choose to exercise the option of making card purchases in sterling when it is presented to them in an attempt to save on exchange fees. However, the credit card provider said that, while the issuing (UK-based) bank does not levy the charge for these buys, the (foreign) acquiring bank generally will.
Abbey also advised customers that the acquiring firm also sets its own exchange rate for the purchase, which can often be uncompetitive and lead to yet more money being lost. This "dynamic currency conversion" appears to be almost completely unknown among Britons, with 92 per cent telling the bank that they had not heard of the practice.
Callum Gibson, head of Abbey Credit Cards, commented: "Generally people assume that if they pay for a transaction in pounds then this means they can avoid paying a foreign exchange fee. Unfortunately, this is not the case."
He added: "When you pay for anything abroad, no matter what the currency, some form of foreign exchange is going on and with most cards, you will be charged for it."
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