Credit Cards – the European credit card sting
Traditionally, using plastic abroad has always meant big charges. Things are a lot better these days, but they have taken a downward slide again in some European countries, as they get the option to add an extra charge to your bill. In France, Italy and Spain, many of the bigger restaurateurs and retailers have a system called DCC – dynamic currency conversion. It means they can convert your payment straight into sterling for you, at the till. This may sound tempting, but that conversion will add another 4 of the transaction onto your bill. What is often happening is that customers are authorising the payment in Euros, only for the retailer to put the payment through as sterling. UK customers don't even realise that this is going on, until they get back and look at the card statements. According to the Visa's DCC guidelines, UK cardholders should be given the option to pay in Euros or sterling. Most people don't get the option, they are not aware that there is an option, and leave none the wiser. The retailer gets the 4 by the way. Perhaps we could have put it down to the language barrier, but seeing as the retailer actually pockets the extra, we're a bit suspicious of their motives. The advice is: request the payment to be put through in Euros. There are a few card companies like Lombard Direct, Saga and Nationwide that don't actually charge you any extra for converting the payment into sterling. The big mainstream banks put a 2.75 charge on, but that's still less than 4, so it's worth paying in Euros. If you look at the cost of changing your money into Euros in the UK, and changing your cash and traveller's cheques in Europe – you'll find that paying by credit or debit card while abroad is still cheaper because Visa and MasterCard have better exchange rates. It's also reassuring to take money out as you need it, rather than walking around with wads of cash, or having to queue to change traveller's cheques. In case you were still thinking of changing your money in a bureau de change, don't fall for the ‘commission free' signs. They just charge you more on the actual exchange rate, so you're still paying extra – how else do you think they manage to stay in business! Another tip: don't be tempted to withdraw cash using your credit card – either abroad or in this country. You start paying interest immediately, and it's always a very high rate of interest too. If you want to take cash out, only use your debit card. That brings us neatly onto our next subject, you need to be very vigilant when dealing with your debit and credit cards. If someone manages to steal them, they will no doubt get away with a lot of your hard earned cash before you cancel the cards. What's the problem you may think, we're chip and pin now! But although card fraud has reduced thanks to this new technology, there is more than one way to skin a cat (so to speak). Here's how (true story): Mr
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