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By Emma Tyrrell

Heading off to the slopes this winter? All those ski passes, après ski drinking sessions and cheesy fondues could end up costing you more than you expect.

Shops, restaurants, hotels and car rental companies in Europe and the United States are increasingly billing credit card users in pounds sterling rather than in the local currency. But attractive and straightforward as this "service" may seem at first glance, it could end up hitting you in the pocket, particularly if you are one of those smart cookies who has kitted themselves up with a card with low or no foreign exchange charges.

According to Nationwide Building Society estimates, UK card holders were charged almost £5 million by retailers converting their spending into sterling, in July this year alone. The practice, called Dynamic Currency Conversion, can also hit holidaymakers who use ATMs.

Travellers to France , Italy , Germany , Spain , Ireland and the US are particularly at risk, as retailers and restaurants in those countries often convert charges into sterling, with their own additional conversion fee attached.

In theory, shops, restaurants and other organisations offering the currency conversion service should get your consent before they convert the bill into sterling.

But evidence is emerging that some retailers are not complying with the rules and are slapping on conversion charges without cardholders' consent. Some cardholders have reported that when they have tried to insist on paying in local currency they have found retailers refuse to switch back.

If you pay in local currency, you're still likely to be charged a currency conversion fee by your card provider, in the form of loading to the "wholesale exchange rate". Your card company uses this wholesale rate to translate the foreign currency cost into sterling, but will typically add a 2.75 per cent loading.

But some credit cards don't load the wholesale rate – notably Nationwide's credit and debit cards, and Lombard Direct's credit card. They will convert your money using the wholesale rate itself, so holidaymakers with those cards should be especially careful to ensure that all their foreign bill slips are made out in the local currency rather than in sterling. Amex's Gold card and the Liverpool Victoria card apply no loading for European transactions, so their users should also be watchful. So too should Saga card holders. Saga applies a lowish 1 per cent loading, likely to be lower than the conversion loading charge applied by any foreign retailer.

Users of other cards may end up paying more if the retailer bills them in sterling, or may find that it is marginally cheaper. Unless you know what your card provider charges for currency conversion, and you can find out what the wholesale sterling exchange rate for that day is, in order to compare it to the retailers sterling rate, it will be impossible to know at point of sale which is the best option.

And, lets face it, you're on holiday. Are you really going to spend you time working out exchange rates when you could be whizzing down a black run, or scoffing another fondue? For those with Nationwide, Lombard Direct, Amex Gold, Liverpool Victoria or Saga cards it is probably worth insisting on being billed in local currency. For the rest of us – life's too short.