Changes in banking procedures throughout Europe are likely to affect travellers to France this summer in several unexpected ways.

 

Most UK banks have quietly reduced the maximum amount of money that can be withdrawn in a cash machine from £500 to £300. Continental banks still have variable limits on the amount of money that can be withdrawn, but their vulnerability to fraud is encouraging them, too, to reduce the maximum amount, in some instances to a lower level than the UK. As many machines are not multi-lingual, it is not always immediately obvious that a transaction is being refused because it takes the customer above his daily maximum. Some machines have also been programmed to refuse a second withdrawal on the same day, even if the overall maximum is not exceeded.

 

Although at first glance it may seem that a daily maximum of, say, around 400 Euros should still be ample, this is not always the case. A large family group can easily run up a meal bill of this size (and always seem to do just that when it is your turn to pay) and some of the restaurants offering the best value for money in out-of-the-way places still do not readily take credit cards. Although you can make smaller withdrawals on consecutive days in anticipation of such a bill, the location of your villa is often a significant distance from the closest cash point, incurring petrol costs and parking charges for each journey, quite apart from the hassle involved.

 

Some visitors to France have got into the habit of making cash withdrawals on the premise that, as at many UK cash machines, there are no hidden charges. In fact, almost every UK bank will make a 2.75% charge to cover the handling costs of a French transaction and this is often built seamlessly into the sterling conversion shown on your bank statement. Although some UK clearing banks belong to an international exchange scheme, such as the Global Alliance, that gives them reciprocal arrangements with one or more French banks, if you use a cash machine belonging to a bank outside the scheme, an additional 1.5% will also often be payable.  

 

These are minimum charges: some small foreign exchange bureaux, especially those advertising ‘no commission’, build a much larger percentage into their advertised exchange rates, which is impossible to measure unless you take the trouble to compare the rates directly with those offered in a major bank. However, even these high street booths will seem good value for money when compared with the bureaux located at airports and main railway stations. These establishments count on unprepared travellers arriving without a Euro to their name and load their charges accordingly.

 

Quite apart from putting off the evil day when you actually have to pay, credit cards are able to negotiate highly competitive exchange rates because of the volume of their transactions. Although the majority will also charge a 1% fee for making the currency conversion, when hidden bank charges are taken into account, most travellers are better off using credit cards to buy goods or services than making a cash point withdrawal. However, a few credit card companies make a significantly larger levy, 2% or even 3%, so it is worth checking the charges imposed by any card you intend to use.

 

Now that more and more of us know our credit card pin number following the introduction of chip’n’pin cards, the temptation to use it abroad to withdraw cash has greatly increased. Not everyone appreciates that the most expensive way of managing your money is to withdraw cash or purchase travellers cheques using a credit card. Such transactions attract a fee of at least 2% of the total but after the exchange rate has been calculated by, for example, Visa or MasterCard, it will be adjusted upwards by the applicable bank by at least a further 2.7%. Add the interest due on the transaction from the date of the transaction, and the true annualised percentage interest rate sometimes increases from currently just under 6% to more than 20%.

Old fashioned travellers cheques in Euros, ordered directly from an account in credit, still offer both security and the best value. However, only some French banks will convert them into cash, often without charging a fee, and you must present your passport with the cheques and remember to sign them before you leave the UK.

 

As for cards, they have a perverse habit of ceasing to work while abroad and it is prudent to test them, especially those not regularly used, before a trip, and the applicable personal identification numbers. To guard against the consequences of the cards being lost or stolen, lay them all face down in a copier and take two photocopies. Bring one with you and leave a copy with a relative or friend in the UK. It is nearly always the best-prepared and best-informed traveller who returns home smiling.