The great holiday money rip-off

With British holidaymakers set to spend more than £4billion on their plastic this summer, this exchange rate trick could see cash-strapped families having to pay hundreds of pounds more while they are away.

Table of contents

The great holiday money rip-off

The great holiday money rip-off

With British holidaymakers set to spend more than £4billion on their plastic this summer, this exchange rate trick could see cash-strapped families having to pay hundreds of pounds more while they are away.Bob Atkinson, travel expert from holiday comparison site Travelsupermarket, says: ‘Sneaky shops and restaurants are increasingly charging tourists in sterling, knowing that people feel more comfortable with transactions in their own currency. But this is a huge rip-off.‘The golden rule when abroad is always pay in the local currency, never pay in pounds and pence.’Card giant Visa Europe estimates 2per cent of all overseas transactions made by Britons were converted by retailers into pounds.Industry insiders believe the vast majority of these would have been in large tourist resorts.When you pay for a meal or shopping overseas using a credit or debit card, you’re supposed to be given the bill in the local currency.On occasions, you may be given the choice of paying in sterling. This is where overseas retailers and restaurants make their mark-up.They will add 5per cent or even more to the bill — usually without telling the customer. The retailer pockets the entire 5per cent.Frequently, this mark-up will not even appear on the bill. Instead, it may appear on the card receipt in small print, by which stage it is too late to complain. Some cash machines run by overseas banks also use the same trick, known as ‘dynamic currency conversion.’Instead of offering the cheaper Visa or MasterCard rate, the transaction is converted into sterling there and then, using a poor exchange rate set by the bank. There is no limit to how much banks or retailers can charge, and no consumer protection for people who later realise they have been ripped off.Mark Bowerman, spokesman for trade body the UK Cards Association, says: ‘Paying in sterling may be appealing because you know exactly how much will appear on your bank statement.

Action to take

  • Insist on all payments being in local currency.
  • There are credit cards which do not charge a fee for withdrawing cash, but you will be charged interest from the moment you make the transaction.
  • The best fee-free cards are Halifax Clarity, which typically charges 12.9 per cent interest, and Santander Zero, which charges 27.9 per cent.
  • Nationwide, Post Office, Saga, Santander Zero and Halifax Clarity, don’t have fees for purchases.
  • Alternatively, you can use a pre-paid credit card. You load up a plastic card with a currency of your choice at a set exchange rate. You can then use the card to pay or withdraw cash wherever you see the MasterCard or Visa logo.
  • The Caxton FX and FairFX card are among the cheapest. These, unlike many others, do not charge a fee for purchases.
  • Prepaid cards sold by travel agents may be expensive. You can compare the best deals on a comparison site, such as Moneysupermarket.com

Join our Newsletter

Subscribe and get the latest updates about inheritance tax and Estate Planning into your mailbox.

We help people with over £1 million in current assets pay ZERO in UK inheritance tax

One stop comprehensive specialist advice - Tax, financial planning and legal advice service with 18 years experience.

What our clients say
Read our 114
    
reviews

"It is gratifying to finally come across an adviser who gives sensible ongoing advice which is very client focused."

Frank Hibberd

Retired gentleman

"It is nice to know that we can now be certain that our daughter will inherit our money without giving a large slice of it to the government ."

Tony & Sue Perriss

"Everyone's situation is different but having an initial discussion with Charles has really helped me personally navigate what can be a daunting subject."

Bobby Chadda

"I particularly want to thank you for the open and transparent manner in which you have serviced my tax planning needs since I first met you seven or so years ago. In arranging my tax planning through you, I have confidence"

Michael Mahon

Retired gentleman

"Charles was really helpful from the outset and quickly clarified our situation for us... I have used Bluebond for  IHT and other tax advice and they have been very helpful with both. Charles is a very experienced and knowledgeable individual and I highly recommend Bluebond's services."

Sam Attenborough

Retired gentleman

I have used Bluebond for setting up a discretionary trust for my children as well as inheritance tax and estate planning for my home and  other properties. Having searched for years, it was only after meeting and speaking with Charles that I felt confident enough to take these next steps, and I'm very glad I did. His ability to explain complex issues in simple terms and walk you through every step of the process is quite simply unparalleled.

Imran Qureshi

Excellent and comprehensive advice concerning all things financial in one place. Enthusiastic, Educational, Expert, value oriented, Professional and Polite are adjectives that come to mind as well as great attention to detail.

Deirdre Buckley

Inheritance tax is a minefield. Charles de Lastic of Bluebond Tax Planning is the best in the business at helping you to chart the path that is right for you to ensure your estate is structured in the most tax efficient manner.

Nicholas Dickinson

Charles provides clients with valuable insights that clearly demonstrate expertise built over the years. Charles and his team guided us through a estate planning journey and then addressing complex Inheritance Tax matters. They have been very transparent with their advice and cost. Overall an excellent service. Highly recommended

Shailesh Karia

The information contained in this web site is for UK consumers only.  Like most firms of solicitors and accountants, Bluebond Tax Planning is not regulated by the FCA. The content of this website does not constitute FCA regulated financial advice and all content is provided for general information purposes only. Bluebond is not responsible for any action you may take as a result of information on this site. All advice will be delivered on a personal basis once we fully understand your situation and our client agreements have been signed.

Copyright © 2024 Bluebond.co.uk
-
Copyright Notice
-
Legal Disclaimer
-
Terms & Conditions
-
Privacy Policy