However good it tastes, you may find yourself plunged back into a stressful

situation when the bill arrives. Typically, when you put your card into a foreign

payment terminal, it will ask you to make a decision: “Do you want to pay in

pounds or euros?”

Pick the wrong one, and you could end up paying nearly 8 per cent more than

you need to, according to new research into the phenomenon that is “dynamic

currency conversion”.

So before you jet off, repeat this mantra: never pay in pounds abroad, always

pick the local currency. Now thatʼs lodged in your head, Iʼll explain why.

Dynamic currency conversion— in my view, a fancy name for a rip-off — is

widespread in Europe and parts of Asia, but less so in the Americas.

European “chip and pin” card transactions in shops, restaurants and hotels and

cash withdrawals from ATMs are likely to give you a choice between GBP and

EUR. Psychologically, opting to pay the amount shown in pounds could seem

like the right choice. You know where you are with pounds. But the exchange

rate that you are locking into is likely to be a shocker.