Should you pay in local currency when travelling? And how to do that

Currency conversion can easily trip you up when you’re travelling abroad. It can be hard to get your head around, and sometimes it’s virtually impossible to know if you’re getting ripped off or getting a great deal when exchanging currency.

But there are a few solid rules to remember, which will help you avoid unnecessary costs when spending and withdrawing cash abroad.

One of these is whether you should pay in the local currency when travelling. We’ll run through why the answer to this is always yes, along with how to actually do it when using an overseas ATM.

We’ll also show you a way to make your holiday money go further - the Wise card from the money services provider Wise. This clever card automatically converts your pounds to the local currency in 150+ countries at the mid-market exchange rate (close to what you can see on Google), with only a tiny, transparent conversion fee*.

Join over 12.8 million people worldwide who trust Wise with their foreign currency transactions.

💳 Learn more about the Wise card

Should you pay in the local currency when travelling?

Yes - the golden rule when using a debit or credit card abroad is to always pay in the local currency.

When you use a UK-issued card abroad, you may be offered the ‘service’ of being charged in your local currency (GBP). This is known as dynamic currency conversion (DCC). While at first glance this may seem like the easiest option, it’s always best to decline this.

Being charged in the local currency helps you avoid hidden ATM rip-offs by giving you the best possible exchange rate.

This is because if you choose the local currency, your bank or card provider will do the currency conversion and apply the exchange rate. Visa and Mastercard tend to use very competitive exchange rates, and you can also check them online on the day you’re making the transaction.

But if you choose to have the transaction charged in GBP, this gives the ATM permission to give you an arbitrary (generally much more unfavourable) exchange rate for your withdrawal. So, it’s best avoided.

Understanding Dynamic Currency Conversion (DCC)

Dynamic Currency Conversion (DCC) is simply a service that allows you to see the purchase amount in your home currency when paying with your card abroad.

It is presented as being a convenient option for users, as it lets them see the cost of the transaction in a currency they’re familiar with.

However, it’s very rarely the best value option - and that’s because of the exchange rate used to convert the currency.

What happens if you pay in your home currency (GBP)?

If you choose to carry out the transaction in your home currency, the ATM or merchant’s payment processing company will choose the exchange rate for the currency conversion.

It’s extremely likely that the exchange rate will include a margin or mark-up, which is how the ATM operator or other company makes their profit.

This makes the exchange rate worse for you, so you get fewer euros (or whatever the currency is) for your pounds.

How to pay in the local currency - a step-by-step guide

When you’re using your UK-issued card to pay for something abroad (for example, a coffee in a local cafe), you shouldn’t need to do anything differently than you would at home.

Simply tap to pay if contactless payments are accepted, or insert your card and enter the PIN. If at any point you’re prompted to choose the currency you’d like to pay in, select the local currency rather than GBP. However, this doesn’t tend to come up very often.

When using an ATM overseas, you’ll need to follow these steps:

1. Enter your card and make sure to choose ‘English’ as the language if/when prompted
2. Enter your PIN and the amount you want to withdraw
3. At this point, the ATM screen will display a message which looks something like this: “This ATM offers conversion to your home currency.” It’ll show you the conversion rate and any fees, and ask if you want to go ahead.
4. Press ‘No’ or ‘Continue without conversion’ so that you’ll be charged in the local currency rather than GBP.

Spend and withdraw worldwide with the Wise card

If you spend a lot of time overseas, the Wise card could be your perfect travel companion.

Open a Wise account online and you can order the Wise card for a one-time fee of £7 or get the virtual Wise card for £0. It’s a dedicated contactless travel card, letting you spend like a local in 150+ countries worldwide.

It automatically converts your pounds to the local currency at the mid-market exchange rate whenever you spend, only adding a tiny, transparent conversion fee* – or it’s free if you already have the local currency in your Wise account.

And when you need cash, you can use it to withdraw up to £200 a month (max. 2 withdrawals) fee-free. Wise will not charge you for these withdrawals, but additional charges may occur from independent ATM networks.

✅ Sign up with Wise for free