How to pay abroad.

This is one of the easiest ways to overpay abroad. At some point a card machine, a hotel checkout, or an ATM offers to charge you in your home currency instead of the local one. It looks helpful because the amount is shown in your own currency. In reality, it usually costs more.

That offer is dynamic currency conversion. Accept it and the merchant's bank sets the exchange rate, marked up by anywhere from 3% to 12%. A markup buried in the rate rather than charged as a fee is the same move most money transfer services make on the way out of the country, which we measured across eleven of them. Decline it and pay in the local currency, and the conversion runs through your card network, Visa or Mastercard, at a rate very close to the real one (your own bank may still add a fee on top, which Tip 2 covers). You're buying exactly the same thing either way. Paying local just skips the padded rate.

So whenever a screen offers you two amounts, one in the local currency and one in yours, pick the local one.

Even when you pay in the local currency, your own card can still cost you. Some banks charge a foreign transaction fee on every purchase abroad, usually around 2.5% to 3%. There's no popup and no button to decline. It just shows up on your statement later.

Many travel cards and digital banks charge no foreign transaction fee, and the best also convert at the network rate without adding a markup of their own, so check for both, since a card can waive the fee and still shave the rate. Carry two cards from different providers. If one gets lost or blocked, the other keeps you going. If your card lets you top it up instantly from your phone, that's a useful bonus while traveling. Don't be fooled by rewards either: 1% cashback on a card with a 3% foreign fee still leaves you down 2% on every purchase.

Where you can, add the card to Apple Pay or Google Pay and pay with your phone. It works in many countries and keeps your physical card safely in your pocket until you need it.

Cash has its own trap: some credit cards treat a foreign ATM withdrawal as a cash advance and charge interest from the moment you press the button. So for withdrawals, use a debit card or a dedicated travel card and leave the rewards credit card for purchases.

A foreign ATM can charge you three ways on a single withdrawal. First, the machine's own operator fee. These are usually highest at airports and tourist areas. Second, dynamic currency conversion again, the "convert to your home currency?" screen from Tip 1, which you decline. Third, your own bank's foreign-ATM fee, often a flat charge plus a small percentage.

Two of these fees are charged every time you withdraw cash, so taking out more at once usually works out cheaper. And use an ATM attached to a real bank branch rather than a standalone machine in a tourist area. The bright Euronet booths you see all over airports and old-town tourist strips are the ones to skip: notorious for a steep operator fee and a hard DCC sell.

In a few countries you can almost leave cash at home: Sweden, South Korea, and Singapore run on cards and phones. Plenty of others don't. Across much of Vietnam, Morocco, and Southeast Asia, markets, street food, taxis, small family-run places, and tips still prefer cash, and some spots that do take cards add a surcharge on top.

Card minimums are the other reason to carry some. Many shops won't run a card for a small purchase, so a coffee or a bottle of water needs coins in your pocket. Carry a modest amount of local cash for the cash economy, and use your card for anything bigger.

If you need cash, withdraw it from a bank ATM after you arrive instead of exchanging money at the airport. Airport exchange counters like Travelex are convenient, but they often offer some of the worst exchange rates you'll find. For how much cash a specific country actually needs, our destination guides cover the local money scene where you're headed.