Abbey: Holidaymakers 'don't understand dynamic currency conversion'

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www.moneynews.co.uk > General finance > Abbey: Holidaymakers 'don't understand dynamic currency conversion'

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Abbey: Holidaymakers 'don't understand dynamic currency conversion'

Many people are paying bad rates of foreign exchange while abroad, research by Abbey Credit Cards reveals.

According to the survey, 38 per cent of people would choose to pay in pounds while abroad if given the option, wrongly believing that they would avoid foreign exchange fees.

The survey showed that 92 per cent of people were not aware of dynamic currency conversion, in which cardholders have the cost of a transaction converted to their local currency.

While the issuing bank often does not charge the fee, the acquiring bank will, and probably at an uncompetitive exchange rate, Abbey said.

Most people - 61 per cent - wrongly thought the exchange rate is set by their own credit card provider or bank when they transact in sterling abroad.

Callum Gibson, head of Abbey Credit Cards, said that foreign exchange took place when any transaction in any currency was made abroad.

He said most cards would charge for it, citing Abbey Zero as "one exception".

The Times recently warned holidaymakers always to ask to be charged in the local currency to avoid the dynamic currency conversion "scam".

It said retailers often do not inform tourists of the payment options.
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