When using a debit card abroad should I pay in or in local currency?
Many establishments frequented by tourists will give you a choice of paying in local currency or U.S. dollars. You're almost always better off going with the local currency. And remember that your credit card usually has a more favorable exchange rate and lower fees than local merchants can offer.
The benefits of paying in local currency
Your bank may charge a fee to carry out the transaction. The rate your card provider uses when processing local currency payments will, in most cases, be lower than that of the merchant, or foreign bank, when paying in dollars (USD).
The Takeaway
While there are some situations where it may make sense to use DCCs, it's usually better to pay in the local currency – especially if you use a credit card that doesn't charge foreign transaction fees.
To avoid currency conversion fees abroad, always choose 'local currency' whether you're withdrawing cash from an international ATM or spending on a prepaid travel money card.
When you pay by Visa debit card you're protected against fraud for any unauthorised spending. It may be a good idea to make card payments in local currency and avoid paying the local currency conversion charges.
“It's better to pay in local currency through your U.S. bank, so you can control the conversion and get a better rate because you have a relationship with your financial institution,” says Aiello.
So if you're on holiday or traveling for work, our advice is to decline the option of paying in your home currency and instead opt for the more reasonable conversion fees charged by your bank. Your travel experience could end up much cheaper if you do.
The best way to avoid foreign transaction fees is to acquire a no-foreign-transaction-fees credit card, if you qualify for one. Next in line are checking accounts or debit cards with no foreign transaction fee. It is also possible to avoid the fee by paying in the local currency for purchases.
Skip currency exchange: Use a credit or debit card
Credit and debit cards can be a safer option than cash; they offer fraud protection and safety features (such as the option to freeze them in case of misplacement), but once cash is lost or stolen, it can be impossible to recover.
Most international travelers will end up using a combination of cash and cards when visiting Europe. While credit cards are accepted in most situations, currency can be more convenient for public transportation and small vendors.
Should you exchange money before going to Europe?
It's not usually a good idea to exchange currency at the airport, or even at your hotel. These places are definitely convenient, but you're likely to pay a premium for it. Commission fees can be high and exchange rates unfavorable. So, it's worth avoiding it unless you're really stuck.
Yes, credit card companies automatically convert foreign currencies to the domestic currency using their exchange rate. When you look at your card statement, the amount charged will be in the domestic currency.
When you use your card abroad, retailers will often give you the choice of paying in either the local currency or pounds. Always choose to pay using the local currency unless you're sure the exchange rate is more favourable. If you choose pounds, the retailer will handle the conversion and may charge you a fee.
Generally, you should tell your bank the locations you are traveling to and the dates/duration of your travels. This will allow you to continue using your credit cards and debit cards without the fraud detection on your accounts being triggered, preventing you from using your cards.
There may be additional charges from cash machines or banks when you withdraw money abroad or in a foreign currency. Check before you make the transaction.
Open a Virgin Money M Plus current account (the bank's standard current account) and you'll get a Virgin Money Debit Mastercard. It's a contactless card that charges no foreign transaction fees for spending or cash withdrawals outside of the UK.
Helpful tips for using credit cards in Europe
Remember, even little fees can add up. Avoid using debit cards when making purchases. Debit card numbers are too easy to steal and are tied directly to your checking account. Use them only at ATMs, so you don't risk a thief draining your account.
Unlike cash, credit cards provide fraud protection. For starters, most international merchants require EMV chip cards, which are automatically more secure than their magstripe counterparts.
Wherever you wander in Europe, it's wise to travel with cash euros. While ATMs and card facilities are widespread across the continent, this cannot always be relied upon. Some countries or areas off the beaten track have yet to fully embrace card payments, so cash means you won't get caught short.
It is cheaper to exchange money at the bank (or by using an ATM) than the airport. That's because currency exchange stores and kiosks at the airports mark up the exchange rate to make a profit. They know that travelers who just got off a plane probably need money right away.
How much local currency should I take?
A good rule of thumb is to carry $50-$100 a day in the local currency while travelling. Remember, though, that cash may not be the best option to pay for travel expenses. Credit cards offer great rewards, lower transaction fees, and can help you get a better exchange rate.
As long as your ATM or credit card has either a Visa or PLUS logo, you can withdraw cash at ATMs that are part of the Visa or PLUS network. How do I find an ATM in the country that I'm traveling to? Visa is accepted at over 200 countries and territories around the world.
Yes, anywhere Visa is accepted. Visa fees will apply, and it will show on your statement as an international 1% transaction service fee.
Head to Settings > Cellular > Cellular Data Options > Data Roaming and disable it. Android phones: Go to Settings > Network & Internet > Mobile Network > Data Roaming and disable it.
Visa and Mastercard both charge a fee of 1%. Regardless of the type of credit card, this fee is applied to all transactions. Issuing bank fee: Depending on the credit card you use — such as Citibank, Chase or Barclays — some issuers add a charge on top of the network fee, usually around 2%.
