Is it better to pay in card currency or original fare currency?

Should You Pay in Card Currency or Original Fare Currency?

When traveling abroad, you’ll often be faced with the choice of paying in the local currency or using the “card currency” offered by your credit card company. Both options have their advantages and disadvantages, but which one is better for you?

Paying in the Local Currency

• Lower fees: Most credit cards charge a foreign transaction fee of 1-3% on purchases made in foreign currencies. When you pay in the local currency, you can avoid these fees.
• More control over exchange rates: By paying in the local currency, you can take advantage of favorable exchange rates. If the exchange rate is favorable when you travel, you can lock in a better rate than you would by converting your money later.
• Easier to track expenses: When you pay in the local currency, it’s easier to track your expenses. You can simply convert the amounts to your home currency in a spreadsheet or using a currency conversion app.

Paying in Card Currency

• Convenience: It can be more convenient to pay in card currency, especially if you’re not familiar with the local currency. You can simply use your credit card and let the bank convert the transaction for you.
• May offer better exchange rates: In some cases, your credit card company may offer a better exchange rate than you would get by converting your money in cash. However, this is not always the case, so it’s important to compare the rates before making a decision.

Dynamic Currency Conversion (DCC)

When you’re making a purchase in a foreign currency, you may be offered the option of dynamic currency conversion (DCC). This means that the merchant will convert the transaction to your home currency for you. This can be convenient, but it often comes with a hidden fee. The merchant will typically charge a markup on the exchange rate, which can add to your overall cost.

Which Option Is Better?

In general, it’s better to pay in the local currency, especially if you have a credit card that avoids foreign transaction fees. This gives you more control over the exchange rate and avoids the fees associated with DCC. However, if you’re not comfortable with the local currency or you’re not sure whether your credit card has foreign transaction fees, then paying in card currency may be a more convenient option.