You tap your card in a Lisbon restaurant and the machine asks whether to pay 100.00 EUR or 116.00 USD. Seeing the total in dollars looks like a courtesy. In most cases it costs you more, so choose the local currency.
What the machine is offering
The option is called dynamic currency conversion, or DCC. If you pick your home currency, the shop's payment provider converts the amount at a rate it sets, and the markup goes to the provider and often to the shop as well. If you pick the local currency, your card network and your bank do the conversion instead.
The sums
These figures are made up to show the arithmetic. Say your card network's rate today is 1 EUR = 1.10 USD.
| What you choose on the €100 bill | You pay |
|---|---|
| Pay in EUR, card with no foreign transaction fee | $110.00 |
| Pay in EUR, card with a 3% foreign transaction fee | $113.30 |
| Pay in USD on the machine | $116.00 |
Even with a 3% fee, paying in euros saves $2.70 here. Some banks charge their foreign transaction fee on the dollar option too, because the shop is abroad, which would take that total to $119.48. Your card agreement or banking app will list the fee your card charges.
Cash machines ask too
ATMs make the same offer in different words, such as "accept conversion" or a "guaranteed rate". Choose the option without conversion and the withdrawal carries on in local currency. Any fee the ATM operator charges for the withdrawal itself applies either way.
If someone chooses for you
Visa and Mastercard require the customer to agree to DCC, but travellers report that not every shop follows this. Sometimes staff press the button for you. Before you confirm, check which currency the total is in. Afterwards, look at the receipt: two currencies and a line showing a conversion rate or markup mean DCC was used.
If you were charged in your home currency without agreeing to it, ask the shop to cancel the payment and run it again in local currency. If it's too late for that, contact your card issuer.
Websites do it as well
Airline and hotel checkouts often offer to charge you in your own currency. It works the same way, so compare the two totals before you pay.
A ten-second check
Type the local amount into a converter and compare the result with the total on the machine. A converter shows a reference rate, so it won't match your bank to the cent, but a gap of several percent means the machine's rate has a markup in it.