Avoid Hidden Fees on Holiday by Paying in Local Currency

Travelers departing for summer holidays should be aware of a simple money mistake that can lead to unnecessary charges. According to Kate Donnelly, a travel specialist, British tourists should opt to pay in local currency when making purchases abroad.

This means choosing to pay in euros or dollars instead of pounds sterling. By doing so, individuals can avoid the 'hidden fees' associated with dynamic currency conversion (DCC). DCC allows merchants to convert transactions from local currencies to pounds at the point of sale, but often results in a poorer exchange rate and higher charges.

HSBC notes that choosing DCC may seem convenient due to familiarity with the pound, but it can lead to extra fees and higher exchange rates. To avoid these issues, Kate recommends investing in a fee-free card, such as Monzo or Starling, which charge no transaction fees and offer competitive exchange rates.