Avoid the slippery credit card trick

Don't fall for the latest credit card trick when you go to the ski slopes, writes Emma Simon

Skiers must stay off the piste

www.telegraph.co.uk/insurance

Telegraph travel

Holidaymakers heading for the ski slopes this half-term are being warned not to fall for the latest credit card trick, which could add hundreds of pounds to the cost of their winter break.

Nationwide Building Society says it has seen a huge increase in the number of cardholders opting to pay for goods and services in sterling overseas.

Many individual retailers and restaurants will offer this optional service which is known as "Dynamic Currency Conversion".

Customers may think paying in sterling will save them money as they avoid foreign usage fees that are levied on by most credit and debit card providers. But in reality customers often pay a far worse exchange rate, which is determined by the individual retailer.

Rachel Jensen, a spokeswoman for Nationwide said: "During last year's ski season Nationwide customers alone wasted at least £34,000 at just four of the most popular ski resorts in Europe by using dynamic currency conversion."

The number of people being caught out by this tricks is expected to mushroom this year. In November this year the number of Nationwide cardholder paying in sterling rose by 120 per cent when compared to the year before.

Jensen says: "We understand that far more retailers are now offering this service. But we would advise all our customers to pay in the local currency."

Most banks charges a foreign usage fee of about 2.75 per cent for using plastic overseas, whether it is to withdraw cash from an ATM machine or pay for goods and services directly. However, even with this fee most consumers are advised to still pay in the local currency, and avoid dynamic conversion, as it most cases the costs involved will still be higher than any bank charges applied in the UK.

Jensen adds: "Consumers have no control over the exchange rate being applied and are at the mercy of overseas retailers."

The banks estimates that on average customers pay almost three per cent more by opting to pay in sterling. But in some cases customers have paid up to 7 per cent more simply for the privilege of paying in sterling.

Nationwide is one of the few UK banks not to apply charges or loading fees on overseas transactions.

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