Beware hidden card charges when travelling abroad this summer!
Caxton FX, one of Europe’s leading foreign exchange companies and provider of prepaid currency cards, is warning holidaymakers about ‘Dynamic Currency Conversion ’ (DCC) when using their prepaid, debit or credit cards.
DCC is a hidden cost that holidaymakers can often be unaware of. Some retailers or ATMs will offer a cardholder the choice of paying in sterling, converting the price of the purchase from the domestic currency, for example the Euro. The retailer or ATM will then apply their own conversion rate based on large and unfavourable margins which costs the card user money. In order to avoid the avalanche of unnecessary fees the cardholder should always elect to pay in the local currency.
James Hickman, managing director for Caxton FX, comments:
“Dynamic Currency Conversion is a new phenomenon that affects prepaid, debit and credit cards. When your bill arrives at a restaurant for example, you may be offered the facility to pay in pounds rather than the local currency. This could incur a service fee of up to 4% of the value of the transaction which can legally be charged. What is even more frustrating, is that the charge is likely to be included in the bill and not listed separately, ensuring the card holder leaves the restaurant blissfully unaware that they have been charged over the odds. The 4% fee goes straight to the retailer, so it’s in their interest to try to force it on unsuspecting customers. Holidaymakers should be on the lookout for this holiday scam and make sure they don’t pay with their plastic in any currency but the local one.
“By using a prepaid card holidaymakers can save even more money by getting a better exchange rate than the one charged by their credit card company at the time of the transaction. They will also avoid ATM charges and it is a safer and more convenient alternative to cash. Each year fewer people are using travellers cheques because of the administrative hassle of changing them back into hard currency. With a falling number of institutions willing to exchange them, prepaid cards offer a secure alternative. “
Caxton’s FX Currency Cards are prepaid chip and PIN MasterCards® and can be used anywhere you see the MasterCard® Acceptance Mark, whether it be online, in store or at an ATM.