---
title: Travelling Abroad- Choosing Local Currency to Avoid Hidden Costs
description: "Travelling abroad is an exhilarating experience that opens our eyes to new cultures, cuisines, and landscapes. But amidst all the excitement, there’s one thing that can easily slip our minds: the most cost-effective way to pay for our purchases. Choosing to pay in the local currency instead of our home currency can save us from [&hellip;]"
author: Dr Marina Nani (Editor-in-Chief)
date: 2023-04-26T17:07:07.000Z
updated: 2026-02-26T22:02:44.843Z
canonical: https://richwoman.co/article/travelling-abroad-choosing-local-currency-to-avoid-hidden-costs
image: https://cdn.nanimediahouse.com/tt_hfmmae1w.jpg
categories: Money, Travel
content_type: Guide
region: Global
publication: Rich Woman Magazine
---

[Travelling abroad](https://richwoman.co/article/travelling-adding-purpose-to-your-life-and-years-to-your-brain-power) is an exhilarating experience that [opens our eyes to new cultures](https://richwoman.co/article/travelling-breaking-free-from-the-generational-limiting-beliefs-affecting-your-life), [cuisines](https://richwoman.co/article/anxiety-busting-foods-to-fuel-your-body-and-calm-your-mind), and landscapes. But amidst all the excitement, there’s one thing that can easily slip our minds:[ the most cost-effective way](https://richwoman.co/article/how-powerful-is-your-passport-what-are-your-visa-free-destinations-in-2021) to pay for our purchases. Choosing to pay in the local currency instead of our home currency can save us from hidden costs and provide numerous benefits.

When travelling abroad, many people are tempted to pay using their home currency for the sake of convenience. However, this can lead to extra costs that you may not be aware of. In this article, we’ll explain the reasons why you should always choose to pay in the local currency when traveling, as [well](https://richwoman.co/article/your-path-to-wellness-and-prosperity-what-to-expect-from-the-year-of-rabbit-2023) as offer tips for managing your money wisely while on vacation.

## Understanding Dynamic Currency Conversion and its hidden costs

[Dynamic Currency Conversion](https://www.forbes.com/advisor/credit-cards/dynamic-currency-conversion/) (DCC) may appear to be a convenient solution when you’re abroad, allowing you to pay in your home currency. However, this seemingly attractive option conceals the potential drawbacks that come with it. The truth is, DCC involves unfavourable conversion rates, merchant markups, and additional fees that can quickly add up and take a toll on your [travel](https://richwoman.co/article/skip-the-line-2023-s-best-private-tours-to-top-london-attractions) budget.

By choosing to pay in the local currency, [you](https://richwoman.co/article/the-world-needs-more-women-who-dream-big-and-know-their-true-worth) open the door to a host of benefits that can make your travel experience more enjoyable and cost-effective. Firstly, your bank or credit card issuer typically offers more competitive exchange rates than DCC. This means you’ll get more bang for your buck with each transaction. Secondly, by opting for local currency, you eliminate the risk of merchants adding a markup to the conversion rate, which can further inflate the cost of your purchases. Finally, you’ll sidestep additional fees that banks and credit card issuers may charge for transactions made in your [home](https://richwoman.co/article/tips-038-hacks-on-how-to-make-the-most-out-of-your-outdoor-space-at-home) currency.

Steering clear of Dynamic Currency Conversion (DCC) is a simple task—all it requires is a mindful rejection when presented with the option at a retail outlet, eatery, or ATM in a foreign country. By saying no to DCC, you can be [confident](https://richwoman.co/article/women-facing-uncertainty-with-confidence-create-positive-change) that you’re not paying a cent more than necessary.

A DCC should never be imposed upon you. If you find yourself without a choice, the merchant may be violating the regulations set forth by the credit card processor or even local authorities. For instance, when withdrawing cash at an ATM, you should be presented with the choice to [accept](https://richwoman.co/article/the-aftermath-how-to-adjust-with-personal-loss-acceptance-and-emotional-resilience) or decline a conversion offered by a third-party service. Like making a purchase, the ATM should display the withdrawal amount in both local and [home](https://richwoman.co/article/8-easy-steps-to-win-chaos-and-enjoy-harmony-in-my-happy-home-during-quarantine-times-and-beyo) currencies, along with the conversion rate that will be applied if you opt for DCC.

We advise against accepting this type of conversion at an ATM in a foreign country. By declining it, you can still withdraw cash, but your bank will manage the conversion at the prevailing market rate. If an ATM does not allow cash withdrawal without a DCC transaction, it’s best to look for another one.

[To](https://richwoman.co/lifestyle/money/money-cant-buy-happiness-if-you-dont-know-your-true-worth/) further enhance your money-saving strategies while traveling, consider using a credit card that doesn’t impose foreign transaction fees and equip yourself with a currency-converter app for swift money conversions before finalizing a purchase.

When you choose to pay in your home currency using DCC, you may be subject to:

1. **Unfavourable Conversion Rates**: DCC conversion rates are often less competitive than those offered by your bank or credit card issuer. This means you could end up paying more than you would if you paid in local currency.
2. **Merchant Markups**: Some merchants add a markup to the conversion rate, further increasing the cost of your transaction.
3. **Additional Fees**: Your bank or credit card issuer may charge additional fees for transactions made in your home currency, even when using DCC.

> Exploration is really the essence of the human spirit.
> 
> Frank Borman

In short, paying in your home currency can lead to higher costs due to unfavourable conversion rates, merchant markups, and additional fees. Choosing to pay in the local currency, you can avoid hidden costs:

1. **Better Exchange Rates**: Your bank or credit card issuer typically offers more competitive exchange rates than those provided by DCC.
2. **No Merchant Markups**: Paying in local currency eliminates the risk of merchants adding a markup to the conversion rate.
3. **Avoid Additional Fees**: Banks and credit card issuers are less likely to charge extra fees for transactions made in local currency.

Planning your trip abroad and paying in local currency can help you save money by providing better exchange rates, avoiding merchant markups and reducing the likelihood of additional fees.

> I’ve always enjoyed traveling and having [experience](https://richwoman.co/article/amalfi-coast-an-unforgettable-experience-beyond-breath-taking-views) with different cultures and different people. But it’s also a wonderful thing to be able to benefit and enable research, not only in our country but around the world.
> 
> Laurel Clark

## Managing Your Money Wisely While Traveling

To ensure you make the most of your hard-earned money while [traveling](https://richwoman.co/article/self-acceptance-tuning-into-your-unique-talent-while-travelling), follow these expert tips:

- **Keep Your Bank in the Loop**: Inform your bank or credit card issuer of your travel plans to prevent any hiccups with account security or declined transactions.
- **Choose Wisely**: Select a credit or debit card that boasts low or no foreign transaction fees and favourable exchange rates.
- **Go Local**: Withdraw cash from local ATMs to take advantage of better exchange rates and lower fees compared to currency exchange booths.
- **Stay on Track**: Monitor your expenses to ensure you stay within your budget and avoid any unwelcome surprises.
- **Get Acquainted**: Familiarize yourself with the local currency and its denominations to ensure your transactions are smooth and efficient.

When embarking on an international adventure, it’s crucial to understand the importance of paying in local currency. You’ll enjoy better exchange rates, avoid merchant markups, and reduce the likelihood of additional fees. So, the next time you set foot in a foreign land, remember to embrace the local currency and let it be your guide to a smarter and more cost-effective journey.

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