How not to overpay in travel

The British, vacationing abroad, unconsciously overpay millions of pounds sterling as commissions when using credit and debit cards. Such commissions for dynamic currency conversion (DCC) are added by the banks that process the transaction, if you decide to pay in pounds sterling, rather than in local currency. For example, if you pay a serving of Mythos beer in Greece, you will spend 10% more if you do not pay it in local currency. A study by the FairFX travel service provider found that 27% of the £ 26.4 billion spent on debit and credit cards overseas accounted for the dynamic conversion of currencies.

Tourists also lose extra money if they try to withdraw pounds from foreign ATMs instead of the local currency. At the same time, the amount that you overpay when paying for goods in pounds depends on the transaction that the service provider (restaurant, bar or store) concluded with the bank chosen by it. At first glance, the commission charged for DCC is strictly to cover the cost of currency conversion. In fact, the fee may not have anything to do with DCC, and its size, depending on the bank, ranges from 6% to 10%. There are a lot of different charging schemes, but they all have one thing in common - additional fees are always charged over the cost of currency conversion.

If you pay for goods and services in local currency, then all operations of currency conversion will be handled by your bank. And this means that it will be much easier for you to keep track of tariffs and additional fees. In addition, in most cases, this method is cheaper. The only case where payment in pounds can be more profitable than in local currency is if the amount of commission for international transactions in your bank is higher than the fee for DCC.

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