We have all been here before, and we have all gone into full panic mode when we are presented with the card machine on a European getaway asking you straight, do you want to pay in GBP Pounds or Euros or pay using the local currency? Many of us choose at random and regret the decision instantly, even though you have no idea, which is best to select. The fear is from the mind-set of, when we are on holiday, we as travellers are always on high alert and are always looking out for anyone trying to rip us off. In this case, it’s not necessarily that you are getting ripped off but you can always save money if choosing the correct option when paying with debit or credit card aboard.
In this situation, I would first use a credit card when paying for anything abroad as there is a certain level of safety and security in doing so, and in addition to this most UK debit cards will charge you for each transaction made on your debit card/current account if used. Personally, I like to save up my holiday spends and then either pay them onto my credit card and spend away or I put them to one side, use the credit card aboard and pay it off with my left aside holiday funds when I get back.
Why using local currency matter?
The correct answer to the burning question in the first paragraph is that I always choose to pay in the local currency of the country that I am in. Not that you need an example but for those that do, if you’re in the US, choose to pay in Dollars and if you’re in Bulgaria (where I have just come back from) then pay in Bulgarian Lev.
When you pay in GBP pounds, the places you find yourself using your card can mostly set their own conversion rate to calculate your bill/cost of item being purchased, which is usually much worse than the rate your bank would use back in the UK. There have been a number of tests and case studies on this travel hot topic and most have found that you could be paying up to 10% more on all of your combined purchases over the course of your trip. When looking at singular transactions the difference between paying in pounds or the local currency can only be a few pence but if you total that up over the course of an entire holiday then it could certainly affect your bank balance.
Lesson for today kids, when asked if you wish to pay in GBP’s or in the local currency, always pay in GBP’s….. only joking, always PAY USING THE LOCAL CURRENCY!