When you’re traveling outside of your home country, figuring out how much things cost in relation to your home currency can be difficult. You need to know the current conversion rate between the two currencies and then apply that to the purchase price. Sometimes you can eyeball the price when it’s a simple ratio. US Dollars to Japanese yen is currently somewhere around 1:150:
If I were buying something that costs 1500 Yen, I’d know that’s about $10 or a little less. Things get a little more tricky when traveling to the United Kingdom.
If you see something that costs £100, it also costs $125. So think that everything is 25% more expensive than it appears, and you’ll be fine.
For example, if you’re going to Thailand, one US dollar equals 35 Thai Baht. Try keeping that math in your head all the time.
Imagine a hotel, restaurant, or gift shop asking if you’d like to pay in local currency or your home currency. If you’re tired of doing math, I bet you’d jump at the chance to pay in your local money, right?
However, If you ever get this question, ALWAYS PAY IN LOCAL CURRENCY!!!
The service offered is called Dynamic Currency Conversion and is a total ripoff. The location converts the purchase charge to your currency at an exchange rate of their choosing. This is almost always higher than the currency exchange rate that your bank would charge. If you think using this service will save you money by avoiding the Foreign Exchange Fee charged by credit cards, you’re wrong. That fee is charged for any transaction taking place outside of your home country, regardless of the currency used to process the charge.
Despite what the receipt says, we were never offered a choice of currencies that we remember. We assume it was listed on the payment device where we entered our chip to pay the bill.
I used to think this ripoff was only used to overcharge Americans who were traveling overseas. However, I’ve learned that US merchants will also use this scheme on guests from other countries. No matter where you are from, here is what you need to do:
- Always make your purchases in local currency.
- Use a credit card that has no foreign exchange fees.
If you’re from the US and traveling abroad, many cards have no exchange fees. If you are traveling from the UK, you also have several options, including the travel credit card offered by the Post Office.
Using a credit card can be advantageous when you’re traveling abroad since the transaction cost will be converted at the bank rate applicable at the time of the transaction. In fact, the exchange rates that banks charge each other are typically more favorable than the rates offered to visitors buying something in a foreign country. So, by using your credit card, you can get a better exchange rate and save some money.
If you remember one thing when traveling overseas (or simply buying anything in a foreign currency), ALWAYS pay in local currency. Please and thank you!
Want to comment on this post? Great! Read this first to help ensure it gets approved.
Want to sponsor a post, write something for Your Mileage May Vary, or put ads on our site? Click here for more info.
Like this post? Please share it! We have plenty more just like it and would love it if you decided to hang around and sign up to get emailed notifications of when we post.
Whether you’ve read our articles before or this is the first time you’re stopping by, we’re really glad you’re here and hope you come back to visit again!
This post first appeared on Your Mileage May Vary