local banks to pay for overseas travel.

Although there is evidence that some airlines and local travel agencies have accepted them anyway in the past, the Bermuda Monetary Authority has only this week given its formal permission.

Mr. Malcolm Williams, the BMA's general manager, said: "This will give people more freedom to pay for foreign travel as they wish.'' Trips paid for by credit cards such as Visa and MasterCard will not affect a person's $3,000 per trip travel allowance. They can still take out the full amount in cash or travellers' cheques to spend abroad.

Mr. Williams said Bermuda's balance of payments would not be affected by the move, which was not introduced earlier because of administrative complexities.