Money and insurance
Paying by card abroad without giving away fees
The fee that gets paid most often is not charged by your bank: it is charged by the card terminal, and you accept it at the press of a button.
Tomás Berruezo 6 min Photo by Dawid Tkocz on Unsplash There is a fee that gets paid voluntarily on almost every trip and that hardly anyone realises they are accepting. It is called dynamic currency conversion, and it appears as a polite question on the card terminal screen: would you like to pay in your own currency?
Why you have to say no
If you accept, the conversion is done by the merchant or its provider, at the rate they choose and with their margin. If you decline, your bank does it at the card network rate, which is almost always better.
Seeing the amount in your own currency looks convenient, and that convenience is exactly what you are paying for. The same applies at cash machines.
Paying in your own currency outside your own currency area means accepting an exchange rate set by a stranger.
What your bank does charge
| Item | When it shows up |
|---|---|
| Currency conversion fee | On purchases outside your own currency area |
| Cash withdrawal fee | When taking out cash, sometimes with a minimum |
| The machine's own bank fee | Set separately by that machine's bank |
| Credit payment surcharge | According to your card agreement |
Those four lines are what you check in your agreement before travelling. You do not need to switch banks: it is enough to know which of your cards charges least and use that one abroad.
Three habits that genuinely save money
- Always pay in the local currency, in shops and at cash machines.
- Group your cash withdrawals: with a flat fee, taking out cash four times costs four times over.
- Turn on your banking app's notifications so you see every charge as it happens.
And telling the bank
Many banks no longer require it, but a travel notice from the app prevents the security block, which is the most common and most annoying failure: it happens at the worst possible moment and is fixed with an international phone call.
How to call your bank from abroad without overpaying is in how to call from abroad.
Frequently asked questions
Should I pay in my own currency or the local one?
Always the local one. If you accept paying in your own, the merchant does the conversion at its own rate and with its own margin.
What fees does my bank charge abroad?
Usually one for currency conversion and one for cash withdrawal, plus whatever the machine's bank charges. They are in your card agreement.
Do I have to tell my bank I am travelling?
Many no longer require it, but doing it from the app prevents the security block, the most common failure of any trip.
How many cards should I take?
At least two, from different banks and kept in different places.
