New research from Caxton FX, reveals that consumers are still getting caught out by Dynamic Currency Conversion (DCC), costing British holidaymakers up to an estimated £292 million in debit/credit card charges abroad.
DCC occurs whenever someone who is travelling abroad opts to pay for goods, or withdraw cash from an ATM in pounds, rather than the local currency. This is an option presented upon payment; customers may think it is cheaper to pay in Sterling but it is actually the opposite. The typical charge for opting to pay in pounds is around 4 per cent, plus a poor exchange rate which will have been set by the merchant undertaking the transaction.
According to the findings, over half of Brits said they plan to get cash out with their debit or credit card at an ATM machine whilst on holiday, with over 20 million of them opting to withdraw the money in pounds rather than the foreign currency – exposing themselves to the 4 per cent charge.
Additionally, 30 per cent opt to pay for goods in pounds rather than foreign currency when purchasing goods over the counter with their credit/debit card – equating to over 60 per cent of all respondents falling victim to the poor exchange rates and extra charges as a result of Dynamic Currency Conversion.
James Hickman, Managing Director of Caxton FX said: “It’s clear to see there remains a lack of consumer awareness around DCC charges, with a staggering number of people still getting caught out at the cash point. Ahead of the summer, we’re really trying to warn people of the pitfalls, after all, these extra charges over the course of a holiday can add up to a serious amount of cash.”
The average amount Brits spend on a week’s holiday is £360, and according to the research, over 20 per cent of British holidaymakers will withdraw over £200 of this spending money from an ATM machine whilst away. A further third (34 per cent) admit to being totally in the dark when it comes to card charges, having no idea what costs they incur from this.
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