Nationwide has warned holidaymakers to be cautious when using credit cards abroad in light of a new phenomenon known as Dynamic Currency Conversion (DCC).
The building society has found DCC - whereby foreign customers are charged extra for making purchases in sterling - costs UK holidaymakers almost £5 million in July this year.
In the same month, a year-long pilot was also launched to allow ATM providers to operate DCC, which will cause UK cardholders holidaying abroad to pay even more in extra charges.
Nationwide's executive director, Steve Bernau, said: "Nationwide's customers have benefited from the free use of their cards abroad for some years now.
"We want to raise the awareness of all users of cards abroad about the potential to lose out from this so called 'service'.
"We would advise people to check any slip or bill before signing, or entering their PIN."
Nationwide also advises customers to ask for their bill in the local currency, not in pounds sterling, to avoid being stung by the charge.
The building society says DCC is most common in popular holiday destinations such as Spain, France, Germany, Italy, Ireland and the USA.To read more about Credit Card News, click here.
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