Travel and payments Practical guide
Paying by card abroad and comparing checkout currency conversion
Understand the home-currency option on a card terminal, then compare it with local-currency billing using a worked exchange-rate and fee example.
A card terminal abroad may give you two prices for the same purchase. One sends the charge through in the merchant’s currency. The other converts it to your card’s billing currency on the spot. This second option is called dynamic currency conversion, or DCC. To compare the two, estimate what each option will cost in your account currency, including any fees that apply to the international transaction.
Who handles the conversion?
With local-currency billing, the merchant sends the original currency amount. Your card network and issuer determine the conversion under the terms of your card. Your issuer may charge a percentage fee or apply its own rate. Mastercard describes its calculator as indicative and explains that its rate can depend on when the bank authorizes the transaction or, in some cases, when the transaction is processed. The calculator gives you an estimate before payment. Your statement shows the posted amount.
With checkout conversion, the service offered by the merchant or ATM sets the displayed rate. Visa says its merchants and ATMs should show the amount in both currencies, the exchange rate, and any additional fees or markup. They should also let you choose. Read the currency codes as well as the numbers before you confirm. This is particularly helpful when the options use familiar currency symbols or similar-looking amounts.
Compare the same purchase in both currencies
Suppose a bill in the UAE is 480 AED and your card is billed in euros. These are illustrative figures. Assume your issuer charges 2% on the card conversion and confirms that it would add no separate fee to the euro amount offered on the terminal.
| Item | Pay in AED | Accept EUR on the terminal |
|---|---|---|
| Estimate or quoted amount | 480 × 0.25 = €120.00 | €128.00 with conversion included |
| Issuer fee in this example | €2.40 | €0.00 |
| Comparable total | About €122.40 | €128.00 |
The local-currency estimate is €5.60 lower in this example. The difference can change if the processing rate or card fees differ. If the card network’s calculator already includes the fee you entered, use its total directly. When comparing the converted price shown on the terminal, add only fees billed separately. Ask your issuer whether it charges a fee for overseas transactions even if the merchant bills in your card’s currency.
What changes at an ATM?
A foreign cash withdrawal can involve an ATM operator fee, a fee from your own bank and a currency conversion cost. Record the fee displayed on the ATM screen and check which currency it uses. It may be added to the local amount before conversion or listed separately. Then check what your own bank charges. If you are using a credit card, read the cash-advance terms before confirming. The U.S. Consumer Financial Protection Bureau explains that a cash advance can carry fees and may start accruing interest as soon as you withdraw the money, depending on your card terms.
What to check before and after paying
- Before travelling, check the billing currency and the fees for foreign purchases and withdrawals in your banking app. If you carry two cards, estimate the cost separately for each.
- At checkout, compare the terminal’s offer with your estimate plus the applicable card fee. If you cannot see the required conversion details, Visa advises declining the offer and paying in the merchant’s currency.
- Keep the receipt showing your selected currency. Compare it with the posted transaction and ask the issuer to review the charge if the currencies differ.
Use the Souq Al Yom converter for a quick estimate, then use your card terms and the terminal’s itemized offer to identify the charges that apply to the purchase.