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Mastercard bans travel money rip-off – but you can still be stung

Fiskardo beach, Kefalonia island, Greece
Your ice cool bottle of Greek Mythos could cost 10pc more if you choose to pay in pounds Credit: iStockphoto

A loophole that costs unsuspecting holidaymakers billions of pounds a year will be partially closed this week.

From Friday, Mastercard is blocking the use of "dynamic currency conversion" (DCC) for its prepaid cards in a bid to save travellers from over-paying when spending abroad.

The little-known charge is added by retailers, bars and restaurants if you opt to pay in sterling rather than the local currency when asked.

In theory, DCC charges cover the currency conversion but in reality the firms handling the transaction take a margin on top – in the worst cases this can add 10pc to your bill. 

It is almost always far cheaper to pay in local currency. Here your home bank handles the currency...

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