I wrote about Dynamic Currency Conversions this time last year here, which I saw as one of many pitfalls to watch out for when you travel away from your home country.

I recommended at that time to always opt and pay in the local currency to get the best exchange rate as it has been flagged as a con-trick by retailers, particularly in Spain.

However, I have just returned from a trip to Faro in Portugal and I erred on the side of caution and opted 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 this weekend to see how my purchases panned out, only to find that I generally got the market rate set by Mastercard although the 2.99% fee levied by my card provider for each transaction for converting Euros to GBP meant that I would have been better off paying in GBP.

At the time of writing this, the exchange rate is around GBP 1 -v- €1.12 so when the conversion fee is applied it can bring this down by 4 pips to GBP 1 -v- €1.08.

To give you an example, I bought a 1 litre bottle of Jameson’s Irish Whiskey in the Duty Free shop for €15 and I was given the choice to pay £13 which would have resulted in an exchange rate of GBP 1 -v- €1.15.  I chose to pay €15 and it 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 may wish to 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 can have time to work it out.

So, as a general rule of thumb at the time of writing this, €15 = £14 when paying by credit card and if the outlet offers you anything less – take it.

An alternative to all of this would be to 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

I would point out that interest charges may apply from the point of any cash withdrawals, so the main selling points on this card is that they offer no fee to use anywhere worldwide for purchases and no annual fee.

An alternative would be to 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. You can find out more at

Worth knowing.

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