Pay in local currency while traveling ATM machine

Should you pay in local currency while traveling?

by Michael

Field-Tested Travel Tips: Should you pay in local currency while traveling?

We were using a credit card to buy a camera in Germany when when the sales clerk asked us, “Do you want that charged in euros or U. S. dollars?” Huh? We hadn’t been asked that question before and really had no idea of the right answer. We assumed that, as Americans, we’d want to be charged in dollars and not pay in local currency while traveling overseas. Wrong answer.

Be it euros, pounds, drachma or renminbi, always choose to pay in local currency. When your credit card company processes the transaction, they will convert the currency at a more favorable wholesale rate that will be much better than the rate used by the local store or bank overseas.

The same policy applies to withdrawals at international ATMs. Many cash machines offer a choice to convert the transaction into your home currency (in our case U. S. dollars). This is the electronic version of going to an exchange kiosk and paying a poorer rate.


Withdrawal from an ATM without conversion is the better deal.

Here’s an example. Recently in Bucharest we were given this option of conversion while making a withdrawal of 640 RON from an ATM. Based on the current exchange rate of 4 RON/USD we expected the amount to be about $160. Take a look at the photo above that shows the message that popped up saying “This terminal offers conversion to your home currency,” with a posted exchange rate of 3.7492 RON/USD, meaning the withdrawal would have cost us $170.99. This seemed like no bargain, so we chose withdrawal without conversion. Sure enough, our bank gave us the better exchange rate and we were charged with a $161 withdrawal. Going for that other choice on the screen would have cost us an extra $10.

The same thing would have happened had we chosen to be charged in dollars at that store in Germany. On a small purchase at a souvenir shop this might only amount to a dollar or two, but the exchange spread on a week’s worth of hotel and restaurant charges can really add up. Whenever possible, charge items or withdraw money in the local currency; doing so will save you money because of the better wholesale exchange rate that your bank or credit card company will apply to the transaction.

When in doubt about the latest currency rates, use the Google currency conversion tool.

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28581550060_131210d7e7_mLarissa and Michael are your typical middle-aged couple from Philadelphia who’ve been traveling the world full-time since 2011, seeking off-beat, historic and tasty sights. To receive our free quarterly newsletter with updates and valuable travel tips subscribe here.

Bridget @ A Traveling B October 17, 2016 at 8:11 pm

This is such great advice and something I dont’ think gets enough attention! We recently ran into this question on our two week trip to Ireland and did the research to discover that our bank would charge us the lower conversion rate. It would have been a costly error after two weeks if we had made the other decision!

Frank November 7, 2016 at 7:21 pm

I’ve been wondering about that myself and haven’t bothered making the actual comparisons. Very helpful!

Frank (bbqboy)

Michael November 14, 2016 at 9:24 am

It’s a money saver.

Jane M April 25, 2017 at 11:00 am

Phew, I’ve been doing it the right way!! Thanks for the helpful post. I’ve been worrying about this for months but always forget to look it up until I’m confronted with the screen at the ATM. 🙂


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