Always Pay in Local Currency When Traveling Abroad

by joeheg

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:

a graph and a chartIf 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.

a screenshot of a graphIf 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.

a graph and chart of a currencyImagine 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.

I know about this, yet a restaurant we visited on our last visit to the United Kingdom was still able to trick us into paying in USD instead of GBP.


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!

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This post first appeared on Your Mileage May Vary


JJ November 10, 2019 - 10:17 am

I always pay in local currency but I never realized that they still charge the foreign transaction fee even if is paid in USD. None of my cards have those fees anymore, but it’s good to know. Also, thankfully I have the Schwab ATM card which refunds all fees because Brazil charged me the equivalent of $19 to take $100 out of an atm!

Kelly MacKay November 10, 2019 - 10:25 am

This is excellent and I always use local currency. I am planning my Peru trip and everything I try booking in listed in USD prices even though it should be in Peruvian Sol. I will be taking Local currency only.

Gene January 24, 2021 - 8:47 am

This ripoff was once applied to our sizable bill at the Park Hyatt Sydney. It amounted to 10%! We demanded to speak to a manager and it was corrected while we waited.

Michael January 24, 2021 - 9:23 am

China is notorious for this, almost all the big chain hotels automatically charge you is USD or EUR based on your passport – which they require a copy of. You have to catch them before they close out your bill and tell them to charge you in RMB. And yes, when they charge you in USD abroad, your credit card company will also charge you the foreign transaction fee – unless of course you use a card that does not charge that silly fee.

derek November 19, 2023 - 9:12 pm

I agree with the conclusions of this article but can point out one exception. In one country, I was offered a lower price if I paid cash in US dollars. Only one merchant made that offer.

MandN November 19, 2023 - 10:29 pm

As others have said, it’s an issue with hotels in certain countries. In my case, I have that problem when traveling to Turkey, especially with Hilton. I make a reservation way in advance and it’s quoted in Turkish Lira. Then, of course the Lira keeps dropping like a rock the past few years and so when you finally get to the hotel and check out, they charge me in Euro (I’m an American by the way). They never ask me if I want to be charged in Euro, they just do it anyhow to compensate for the falling Lira. My final bill always comes out to more than what it would have been had they charged me for the rate I reserved it at in Lira. I’ve had arguments with the hotel management over this. Really underhanded that they do this.

Roshika November 20, 2023 - 1:45 am

Absolutely agree! I learned the hard way that paying in local currency is the way to go. Those dynamic currency conversion options can end up costing a lot more than you realize.


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