‘Should I pay in my home currency when I travel abroad?’ is a question that many people ask themselves, hence sharing my experience with you.

This is referred to as Dynamic Currency Conversion, which is one of many pitfalls to watch out for when you travel away from your home country.



I erred on the side of caution on a trip to Faro in Portugal and chose to pay in Euros every time I used my credit card as opposed to GBP (Great British Pounds).

I had a look at my statement when I returned home and found that I generally got the market rate set by Mastercard + 2.99% fee for each transaction for converting Euros to GBP. This meant that I would have been better off paying in GBP.

The exchange rate was around GBP 1 -v- €1.12, so when the conversion fee is applied it brings this down by 4 pips to GBP 1 -v- €1.08.

I bought a 1 litre bottle of Jameson’s Irish Whiskey in the Duty Free shop for €15. I was given the choice to pay £13 which would have resulted in an exchange rate of GBP 1 -v- €1.15. I paid €15 which equated to £13.85, resulting in an exchange rate of GBP 1 -v- €1.08.

By opting to pay in GBP, I would have avoided the conversion fees and got a better exchange rate from the retailer which I never thought would be the case. I’m not grumbling as it costs £32 a litre in the UK!


You can ask the retailer how much a purchase would be if you paid in GBP before proceeding if you’re not in a queue, so you have time to work it out.

The exchange rate at the time was €15 = £14 when paying by credit card. If the outlet offers you anything less – take it.

You can apply and obtain 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.

You could also use a Revolut card. 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? Do you prefer to pay in your home currency when you travel abroad?

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