Is It Better To Pay In Local Currency When Abroad? - HSBC UK (2024)

FAQs

Is It Better To Pay In Local Currency When Abroad? - HSBC UK? ›

If you choose to pay in local currency, you'll avoid dynamic currency conversion fees and in most cases will get a better exchange rate.

It's always better to pay in the local currency when you're on holiday. If a retailer offers to convert your card transaction into pound sterling, politely decline and continue with the transaction in the local currency. So if you're in France, pay in euros, if you're in the United States, pay in US dollars.

Research shows that in most cases you can save by opting to spend in the local currency. For example, that would mean choosing euros in Spain or dollars in the US. When you choose to pay in the currency of the region or country you're visiting, Visa or Mastercard will set the exchange rate.

While there are some situations where it may make sense to use DCCs, it's usually better to pay in the local currency – especially if you use a credit card that doesn't charge foreign transaction fees.

Purchases outside of the UK

If you use your debit card to make a payment or buy something in a foreign currency, we will charge you a 2.75% fee (which will show on your statement as 'non-sterling transaction fee'). If you buy something in GBP sterling whilst outside of the UK, we will not charge this fee.

It's free to use these foreign exchange services but usual transaction fees apply.

It's completely up to you whether you exchange money before you travel to Europe, or get your euros when you arrive.

Importers who pay for goods in the local currency may benefit from suppliers who offer a lower price on the goods purchased. When importers remove the exchange rate risks associated with converting USD to the local currency, suppliers are more likely to offer customers a 1% to 5% discount on the transaction.

Should I pay in local or card currency? ›

As they can adjust the exchange rate and the conversion fees they charge, it's often more expensive to pay this way compared to in the local currency. Paying in the local currency means your bank or card provider will complete the exchange, usually at a better rate.

Payments made in local currency are typically processed faster than payments made in foreign currency. This is because the banks involved in the transaction don't need to convert currencies. It's more reliable.

On top of the cash withdrawal fee, you will also need to pay interest on the cash you withdraw using your credit card. Avoid using a credit card abroad if you plan on making cash withdrawals due to the excessive charges that come with them.

To avoid currency conversion fees abroad, always choose 'local currency' whether you're withdrawing cash from an international ATM or spending on a prepaid travel money card.

HSBC credit cards don't charge foreign transaction fees. However, if you use your HSBC Debit Mastercard® card, you may be charged a fee for any purchases abroad. This includes international payments made online.

Use local cash.

Likewise, in some non-eurozone countries, the euro is commonly accepted, but usually a bad deal. For example, in Switzerland — which officially uses Swiss francs — some ATMs give euros, prices in touristy areas are listed in both currencies, and travelers can get by with euro cash.

Using a debit or credit card

It means you can avoid carrying large amounts of cash around, and if using a credit card for an expensive transaction, you'll get certain legal protections if anything goes wrong. If your wallet is lost or stolen, it should be fairly straightforward to cancel your card(s) too.