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Choosing between local currency or home currency when using your cards abroad

Jan. 24, 2021
3 min read
Choosing between local currency or home currency when using your cards abroad
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If you've ever paid for something in person using a credit card or debit card while abroad, you may have been given the option of choosing to pay in the local currency or your own home currency. For example, if you take a USD-issued card and pay for a meal charged in euro in Italy, you'll be handed a payment machine and given the choice between paying in EUR or USD.

You may also be given this option at a cash machine/ATM. You may be encouraged by the machine to select home currency after seeing information like "Choosing home currency to lock in your rate now and avoid any currency fluctuations".

Related: How to best use cash while traveling abroad

While it may be enticing and convenient to choose that home currency then and there, you should always choose local currency and not home currency. The reason for that is that where the merchant or cash machine operator calculates a conversion rate to give you a home currency figure then and there to select, they will give you an awful rate, far below market exchange rates.

Each time you use your credit card, the merchant hands over 2 - 4 percent of the transaction in fees. Image courtesy of Neustockimages via Getty Images.
(Photo courtesy of Neustockimages/Getty Images)

Why? Because they can pocket the difference. They can offer you any rate you want and if you accept it, they can process it at that rate and the savings they make against the market exchange rate is easy profit for them.

Always select local currency. The rate will be significantly closer to the official market rate.

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If a bank teller or shop owner or waiter tries to convince you to pay using your home currency do not agree — insist on local currency. If they make this selection for you and select home instead of local currency, I would hold your ground and insist they refund the transaction and do it again allowing you to make the selection — you are well within your rights to do this as they have done something they should not have.

While they can choose whether to accept cards and which cards they can accept, they should not be manually selecting between local and home currency on your behalf.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees