Is It Better To Pay In Local Currency When Abroad? - HSBC UK (2024)

FAQs

Is It Better To Pay In Local Currency When Abroad? - HSBC UK? ›

If you're using your card outside the UK in shops, bars or restaurants and are given the choice of paying in pounds or local currency, you could consider choosing local currency. If you choose to pay in local currency, you'll avoid dynamic currency conversion fees and in most cases will get a better exchange rate.

It's always better to pay in the local currency when you're on holiday. If a retailer offers to convert your card transaction into pound sterling, politely decline and continue with the transaction in the local currency. So if you're in France, pay in euros, if you're in the United States, pay in US dollars.

Research shows that in most cases you can save by opting to spend in the local currency. For example, that would mean choosing euros in Spain or dollars in the US. When you choose to pay in the currency of the region or country you're visiting, Visa or Mastercard will set the exchange rate.

While there are some situations where it may make sense to use DCCs, it's usually better to pay in the local currency – especially if you use a credit card that doesn't charge foreign transaction fees.

Purchases outside of the UK

If you use your debit card to make a payment or buy something in a foreign currency, we will charge you a 2.75% fee (which will show on your statement as 'non-sterling transaction fee'). If you buy something in GBP sterling whilst outside of the UK, we will not charge this fee.

Spend and send money around the world in multiple currencies, with no HSBC fees. Eligibility criteria apply. Non-HSBC fees may apply.

There's no need to inform us before you travel. You can let us know it's you using your card abroad by making a chip and PIN payment when you arrive. Please make sure your contact details are up to date so we can get in touch if there are any problems.

It's completely up to you whether you exchange money before you travel to Europe, or get your euros when you arrive.

Your best bet to avoid international transaction fees is to go with a fee-free product or bring cash with you. But it's not always possible, depending on where you travel, nor is it safe to carry a large amount of money. So you could withdraw cash at ATMs as you travel, but beware, this can be costly.

Importers who pay for goods in the local currency may benefit from suppliers who offer a lower price on the goods purchased. When importers remove the exchange rate risks associated with converting USD to the local currency, suppliers are more likely to offer customers a 1% to 5% discount on the transaction.

Should I pay in local or card currency? ›

As they can adjust the exchange rate and the conversion fees they charge, it's often more expensive to pay this way compared to in the local currency. Paying in the local currency means your bank or card provider will complete the exchange, usually at a better rate.

Payments made in local currency are typically processed faster than payments made in foreign currency. This is because the banks involved in the transaction don't need to convert currencies. It's more reliable.

To avoid currency conversion fees abroad, always choose 'local currency' whether you're withdrawing cash from an international ATM or spending on a prepaid travel money card.

HSBC credit cards don't charge foreign transaction fees. However, if you use your HSBC Debit Mastercard® card, you may be charged a fee for any purchases abroad. This includes international payments made online.

With the Starling Bank account you do not pay any fees to withdraw foreign currency from a cash machine while anywhere in the world outside Europe.

Use local cash.

Likewise, in some non-eurozone countries, the euro is commonly accepted, but usually a bad deal. For example, in Switzerland — which officially uses Swiss francs — some ATMs give euros, prices in touristy areas are listed in both currencies, and travelers can get by with euro cash.