Always deal in local currency when on holiday

Ruth Jackson with a foreign-exchange sting to avoid while on holiday. Plus three tips to save you money.

We mentioned some weeks ago a new trick to part you from your money when you're abroad, whereby businesses offer to charge you in sterling rather than the local currency, but sting you with a terrible exchange rate. Known as dynamic currency conversion (DCC) it is now appearing at cash machines in Spain.

Take cash out on your Spanish holiday and you will be confronted by a message asking whether you want to be charged in GBP rather than Euros, and giving you a 'yes' or 'no' option. Now either way you will end up with euros it's just a case of how much those euros will cost you. If you choose 'yes' and are shown how much you are withdrawing in sterling, you will be stung. "The exchange rate is poor and the conversion fee high, with profits funnelled back to the retailer," warns Patrick Collinson in The Guardian. Just say 'no' and stick to dealing in local currency, both at the cash machine and when paying in shops. It may not seem as convenient, but it will save you valuable pounds.

Little and often is the key to foreign transfers

Sending money overseas doesn't have to be an expensive headache. If you want to send small amounts to a friend or relative abroad, PayPal offers the cheapest solution, says Kate Hughes in The Independent. "The exchange rate may not match up to the currency brokers, but it is free to send money online via PayPal in a choice of 18 currencies," says Hughes. Simply create a PayPal account and you can send money to anyone with an email address. The person receiving the money will have to pay a small fee, but it will be substantially less than the cost of sending money via a high-street bank.

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Save on your supermarket shop

Waitrose has launched a new online shopping service, WaitroseDeliver. Unlike Ocado, this service gets the products from your local store rather than a centralised warehouse, so charges a flat delivery fee. At the moment you can get £15 off a £50 online order by entering the code 'save15' on the site, says This code should work twice per household on two separate orders as long as you use it before 31 August 2008. WaitroseDeliver isn't available nationwide but you can quickly find out on Waitrose's website whether it is available in your area.

Discount dining

It seems restaurants might be getting nervous about the credit crunch's effect on their custom. Lots of discount vouchers are now appearing. "There are some great offers on Italian meals this summer," says Jasmine Birtles in the Daily Express. Head to the 'competitions and offers' section of to pick up a voucher for two pizzas for the price of one at Pizza Express, valid until 6 August. Or visit to get 20% off your total bill for up to six people at any Bella Italia restaurant. Just print off the coupon.

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.