Always choose to be charged in the local currency!

Rob Braileanu

 · 10/02/2016  · 10/02/2016

When you’re travelling abroad, you should always choose to be charged in the local currency of the country you’re in! If you’re in Thailand choose Thai Baht, in Spain, Euros or in the United States, Dollars.

Why? If you don’t, you’re often charged a fee and will receive a mediocre exchange rate set by the ATM provider or merchant acquirer.

Here’s why you should use local currency

Local or home currency? Euros or dollars? If you’ve travelled abroad recently, you’re often asked this question when paying by card or at an ATM. This seemingly innocent question is actually a bit of a trap.

If you choose to be charged in your home currency, the merchant or ATM provider can apply their own exchange rate. This rate usually has a mark-up on the interbank rate, enabling the ATM provider or merchant to make a profit on your transaction.

This is possible due to a ‘service’ called Dynamic Currency Conversion. This is provided by a company that acts as a go-between from the merchant, and your credit card provider. They usually charge around 3% of the purchase price to convert to your home currency.

In the example below, you can see that Santander are adding a 2% markup on the real exchange rate. The mark-up applied may not always be so transparent.

tumblr_inline_obae0gg3Va1ty3m0w_1280*exchange rates are subject to change and the above is only an demonstrative example

How can I get around this?

Use your RevolutCard abroad, and always choose to be charged in the local currency. This means we’ll convert your Revolut account balance into the local currency using the real interbank exchange rate.

This means the ATM provider and merchant won’t be able to charge you to convert your money, as we’ll do it for you. Fee free of course 😉