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're using your card outside the UK in shops, bars or restaurants and are given the choice of paying in pounds or local currency, you could consider choosing local currency. 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.

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.

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.

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.

The Takeaway

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.

Resist the urge to buy foreign currency before your trip.

Some tourists feel like they must have euros or British pounds in their pockets when they step off the airplane, but they pay the price in bad stateside exchange rates. Wait until you arrive to withdraw money.

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.

Your credit card provider will use a conversion rate offered by Visa, Mastercard or American Express. This will usually be better than the rate you would get from the retailer or ATM. Expect a small currency conversion fee and, if you're withdrawing cash, a cash transaction fee.

Does HSBC charge a currency conversion fee? ›

All of our HSBC Credit Cards have no foreign transaction fees. If you are a Premier or Jade client, you can also enjoy no foreign transaction fees on your HSBC Premier World Debit Mastercard® or HSBC Jade World Debit Mastercard® card³.

Unlike other credit cards that may charge foreign transaction fees, our HSBC Premier¹ and HSBC Elite Mastercard® ² credit cards have no foreign transaction fees.

Cash fee

There's no cash fee either for using your debit card to withdraw money from a cash machine outside the UK if you're an HSBC Premier customer. For other HSBC accounts there's a cash fee of 2% (minimum £1.75, maximum £5) on withdrawals using a debit card. With a credit card the cash fee is 2.99% (minimum £3).

Fees aside, using your credit or debit card is probably your safest bet for getting an exchange rate that's closest to the market rate. But be aware that while your card's issuer bases its exchange rate on market conditions, it does set its own exchange rate for transactions.

Simply put: when given the option, REJECT the prompt to “pay in USD”, you WANT to be charged in Euros. Your credit card issuer will give a FAR better rate on the conversion when it hits your credit card statement. This is ASSUMING you have a credit card that has LOW or NO FOREIGN TRANSACTION FEES.

Euros, Dollars, Pesos or Rupees – always pay in the local currency when you're using Monzo abroad, so you can get the Mastercard exchange rate, without any extra charges.