Questions of Cash: Is it cheaper to use my debit card when abroad?

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Q. When abroad I pay for hotels and other services by debit card rather than credit card as I get a better exchange rate. Why is this?
RP, York

Q. When abroad I pay for hotels and other services by debit card rather than credit card as I get a better exchange rate. Why is this?
RP, York

A. The bank which issued your credit card probably applies higher charges than the bank which issued your debit card. This is not connected to the use of a debit rather than credit card.

Visa and Mastercard use the same wholesale market rates to determine currency exchange rates and these are applied to debit and credit card transactions. Individual banks choose their own commission charges - "foreign usage loading". If you travel abroad regularly you should consider applying for a Nationwide credit or debit card as it does not charge any foreign usage loading. Exchange rates vary slightly on a day-to-day basis.

Q. We asked in January last year for the Financial Ombudsman Service to investigate our complaint of mis-selling of an endowment policy by Norfolk Street Financial Planning, an IFA. It did not advise me of the risk attached to the endowment and the policy goes nine years beyond my retirement date. After correspondence about elapsed time, the Ombudsman agreed to investigate. We are still awaiting a decision. It seems ludicrous that the body charged with taking forward claims is leaving claimants waiting 18 months for a response.
DF and LI, Crewe

A. Because of the widespread mis-selling of financial products, the Financial Ombudsman Service is overworked and decisions from it can be very slow.

Your complaint would normally have been ruled out of time as you complained more than six months after the IFA rejected your complaint. But FOS is currently investigating whether the IFA complied with the rules in properly notifying you of the time limit for complaints.

You should write to FOS stressing you want an early decision. However, FOS has taken a policy decision to treat non-endowment complaints as a more immediate priority as endowment holders are typically sitting on a paper loss at present rather than a material one - unlike consumers of other financial products, where delay in resolving complaints can cause major hardship.

Q. I was interested to read the letters from American Express customers waiting for free digital cameras for signing up with their card. I'm still waiting for mine. I am also unhappy because last year AmEx charged me £24 for a payment of £167 that was three days late. I calculate this to be equivalent to an APR of over 1,000 per cent.
JF, by e-mail

AmEx says you were not entitled to a free digital camera, as you were signed up by an AmEx representative rather than responding to an advertisement offer. However, it seems AmEx representatives may have displayed details of the camera offer when they signed you up. AmEx is sending you £50 compensation in lieu of the camera.

The late payment charge is your own responsibility and, as with any financial product, you must comply with the rules. As a gesture of goodwill AmEx is repaying half of your late payment charges for last year, £20. To avoid the risk of a repeat, you can set up a direct debit for the minimum payment each month.

* If you have questions, write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail We can reply only to letters published. Please send copies, not originals.

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