Dynamic currency conversion describes the process by which credit / debit card holders, when making a payment abroad, have the cost of a transaction converted to their home currency at the point of sale.

This neatly links in to another blog I wrote about whether you should pay in your home currency or the local currency when you are abroad.

The most diligent of individuals can get caught out. I was, although the exchange rate was ok.

I would have still preferred to pay in the local currency, and I was presented with an invoice that led me to believe I would.



You may / may not be given the opportunity to pay in the local currency or GBP sterling. You will usually be given a worse exchange rate in favour of the retailer if you pay in sterling,

Retailers often ask nicely in a way that infers they are doing you a favour by giving you the choice to pay in your home currency.


Always insist at the point of payment that you want to pay in the local currency to get the best exchange rate given by your card provider. This is known as the market rate.

Get a credit card that charges no foreign exchange or cash withdrawal fees and gives you the perfect market rate. Halifax offers this on their Clarity credit card which advertises the following features;

  • No fee to use anywhere worldwide (interest charges apply)
  • No cash withdrawal fee (interest charges apply and some ATM providers may charge a fee)
  • No annual fee

Interest charges may apply from the point of any cash withdrawals. The main selling points on this card is that they offer no fee to use anywhere worldwide for purchases and no annual fee.

A Revolut card is another option. This card lets you spend abroad in over 150 currencies with the interbank exchange rate (which means you get the perfect exchange rate every time). No fees apply in 29 currencies up to £5K a month.

Have you been caught out by Dynamic Currency Conversion? What options do you prefer using to avoid the various traps and scams when you travel abroad?

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