Using Credit Cards Abroad

Credit Cards abroad – The dangers to be aware of!
Exerts from:
Patrick Collinson
The Guardian,
Saturday July 12 2008
Millions of British holidaymakers heading to Spain this summer will be mugged at the cash machine - by the banks, not robbers. Spanish banks are introducing confusing new messages on ATMs which will direct users into pressing "yes" for something called dynamic currency conversion, known as DCC, that will nearly always leave them out of pocket.
Guardian Money carried out a test in Barcelona. We used a Lloyds TSB card to withdraw cash from a Santander ATM. We took €70 out and pressed the no button. Back in the UK, the cost came out as £56.94. Then we withdrew €70 and pressed yes, knowing that as it was a Sunday, there would be no changes to the exchange rate.
This time, we were charged £57.11. We asked Lloyds TSB who took the additional money. "Santander made the additional revenue in this case. We always advise our customers not to convert their transactions into sterling. So, in this case we would advise our customer to press no," a spokesman says. "Our own analysis has shown, and as proven in this example, that using your card in this way is generally more beneficial, although we cannot guarantee this will always be the case."
So what should holidaymakers do?
· When using a chip and pin card, if the transaction is priced in sterling, ask for it to be changed into euros.
· If the assistant says they don't know how to override the DCC system, ask for the transaction to be voided.
· DCC is only one of the add-on charges at ATMs. Avoid other ATM charges by using a Nationwide Flex debit card or an Abbey Zero credit card, which have no foreign exchange fees.

Read the full article on Credit cards here