The practice by which credit card companies charge British holidaymakers for using their credit cards abroad via foreign exchange conversion charges is earning the companies up to £30 billion a year.
According to financial services information company Defaqto, British travellers spent a total of £30 billion when they used their cards on 64 million overseas trips last year, with conversion charges levied at up to 2.75 per cent.
Defaqto suggests that very few credit card users are aware of the charges the credit card companies are making, with only four standard credit cards - the Lombard Direct Mastercard and three offered by Nationwide - not imposing these foreign charges.
"Consumers need to be aware that paying for goods and services abroad with a credit card will incur a conversion charge," Mark Hayes-Newington, group commercial director of Defaqto, told the Press Association.
"Cards offering no charge for this service are a dying breed and card users are also advised to check their credit card statements when they return to the UK as it is not unknown for incorrect exchange rates to be inadvertently applied.
"In general, credit cardholders need to look at the fine print to ensure that the card is most suitable for their personal requirements."
Cardholders are advised to check their credit card statements carefully on their return from their holiday to ensure they have not had incorrect exchange rates applied to their transactions. Click here to compare the best credit cards.
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