In France, Italy and Spain, many of the bigger restaurateurs and retailers have a system called DCC - dynamic currency conversion. It means they can convert your payment straight into sterling for you, at the till. This may sound tempting, but that conversion will add another 4% of the transaction onto your bill. What is often happening is that customers are authorising the payment in Euros, only for the retailer to put the payment through as sterling. UK customers don't even realise that this is going on, until they get back and look at the card statements.



According to the Visa's DCC guidelines, UK cardholders should be given the option to pay in Euros or sterling. Most people don't get the option, they are not aware that there is an option, and leave none the wiser. The retailer gets the 4% by the way. Perhaps we could have put it down to the language barrier, but seeing as the retailer actually pockets the extra, we're a bit suspicious of their motives.

The advice is: request the payment to be put through in Euros. There are a few card companies like Lombard Direct, Saga and Nationwide that don't actually charge you any extra for converting the payment into sterling. The big mainstream banks put a 2.75% charge on, but that's still less than 4%, so it's worth paying in Euros.

If you look at the cost of changing your money into Euros in the UK, and changing your cash and traveller's cheques in Europe - you'll find that paying by credit or debit card while abroad is still cheaper because Visa and MasterCard have better exchange rates. It's also reassuring to take money out as you need it, rather than walking around with wads of cash, or having to queue to change traveller's cheques.

In case you were still thinking of changing your money in a bureau de change, don't fall for the 'commission free' signs. They just charge you more on the actual exchange rate, so you're still paying extra - how else do you think they manage to stay in business!

Another tip: don't be tempted to withdraw cash using your credit card - either abroad or in this country. You start paying interest immediately, and it's always a very high rate of interest too. If you want to take cash out, only use your debit card.

That brings us neatly onto our next subject, you need to be very vigilant when dealing with your debit and credit cards. If someone manages to steal them, they will no doubt get away with a lot of your hard earned cash before you cancel the cards. What's the problem you may think, we're chip and pin now! But although card fraud has reduced thanks to this new technology, there is more than one way to skin a cat (so to speak). Here's how (true story):

Mr and Mrs B travelled to Prague for a week's holiday, and Mr B was unfortunately pick pocketed and had his wallet stolen. Because the cards were all chip and pin, they did not report the cards as stolen, thinking that the thieves wouldn't be able to use the cards. However, they were not victims of chance criminals. One of the group had watched the couple inputting a pin number at the cash machine. Then another member got the wallet. Armed with a card and a pin number, they cleaned out that account. Then they tried the same number on the other cards - yes, you guessed it, all the cards had the same pin number. Mr and Mrs B returned to find they had been relieved of thousands of pounds.

It's a common mistake - as many as 1 in 3 cardholders use the same pin details for every card they own. Criminals know this, and many get away with a lot of money because they have a whole wallet full of cards they can access. You don't have to be in Europe, this can happen anywhere.

We have two vital pieces of advice:

Guard your number as you input it, someone could be watching, and later they could try to grab your wallet or handbag.

Don't use the same pin number on more than one card. We know it can be hard to remember all these pin numbers, but you can use a variety of tricks to remember them - birth dates for example.

By being vigilant and keeping your wits about you, you can reduce your chances of losing out to card fraud.