Pay in Local Currency or Home Currency Abroad?
You're abroad and the card machine asks whether to pay in the local currency or your home currency. Home currency feels familiar, but it may end up costing you more. Here's who sets the exchange rate in each case, and why local currency is often the better value.
Transkripcija
When in a foreign country, should you pay in the local currency or your home currency?
Let's say you're on holiday and the card machine asks you that question.
Should you pay in the local currency or home currency?
The home currency might feel more familiar and comfortable, but it may end up costing you more.
If you choose it, the shop currency conversion service usually sets the exchange rate, potentially adding extra cost.
If you choose the local currency, usually your card or bank sets the rates and fees.
But make sure to check how much those are.
Local currency is often a better value, but you have to check to be sure.
Make sure to check out our earlier video about Google exchange rates and why you might not be getting them when you're abroad.
Demivolt is proud to be the creator of Fintech Explained, making complex Fintech topics simple and accessible to all of us.
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Apie šį epizodą
You're on holiday, you go to pay by card, and the machine asks you a question: pay in the local currency or your home currency? Seeing the price in a currency you know feels reassuring, but that comfort can come at a cost.
The difference is who does the conversion. Choose your home currency and the shop's currency conversion service usually sets the exchange rate, which can add extra cost on top. Choose the local currency and the conversion is left to your own card or bank, which sets the rate and any fees.
That's why the local currency is often the better value, though it isn't guaranteed. Your own card's rates and fees still apply, so it's worth knowing what they are before you travel. And if you've ever wondered why the rate you were charged doesn't match the one Google shows, our earlier episode on Google's exchange rate explains where the gap comes from.
Pagrindiniai įžvalgos
- Card machines abroad often ask whether to pay in the local currency or your home currency.
- Home currency feels more familiar, but it may end up costing you more.
- If you choose your home currency, the shop's currency conversion service usually sets the exchange rate, which can add extra cost.
- If you choose the local currency, your own card or bank usually sets the rate and fees.
- Local currency is often better value, but check your card's rates and fees to be sure.
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