We are an independent publisher. Our reporters create honest, accurate, and objective content to help you make decisions. To support our work, we are paid for providing advertising services. Many, but not all, of the offers and clickable hyperlinks (such as a “Next” button) that appear on this site are from companies that compensate us. The compensation we receive and other factors, such as your location, may impact what ads and links appear on our site, and how, where, and in what order ads and links appear. While we strive to provide a wide range of offers, our site does not include information about every product or service that may be available to you. We strive to keep our information accurate and up-to-date, but some information may not be current. So, your actual offer terms from an advertiser may be different than the offer terms on this site. And the advertised offers may be subject to additional terms and conditions of the advertiser. All information is presented without any warranty or guarantee to you.

This page may include: credit card ads that we may be paid for (“advertiser listing”); and general information about credit card products (“editorial content”). Many, but not all, of the offers and clickable hyperlinks (such as a “Apply Now” button or “Learn More” button) that appear on this site are from companies that compensate us. When you click on that hyperlink or button, you may be directed to the credit card issuer’s website where you can review the terms and conditions for your selected offer. Each advertiser is responsible for the accuracy and availability of its ad offer details, but we attempt to verify those offer details. We have partnerships with advertisers such as Brex, Capital One, Chase, Citi, Wells Fargo and Discover. We also include editorial content to educate consumers about financial products and services. Some of that content may also contain ads, including links to advertisers’ sites, and we may be paid on those ads or links.

For more information, please see How we make money.

Reader Request: Why You Should Always Pay for Foreign Purchases in the Local Currency & Not in US Dollars

  • Million Mile Secrets

    • Signing up for credit cards through partner links earns us a commission. Terms apply to the offers listed on this page. Here’s our full advertising policy: How we make money.

    Does Hundreds of Dollars in Free Travel From One Credit Card Bonus Sound Unbelievable? Join the Club!

    Don’t forget to follow me on Facebook or Twitter!

    Million Mile Secrets reader Jonathan writes in:

    One thing I can’t figure out – is it better to pay for things in local currency and let Visa/ MasterCard convert back to US [currency]?  All the places I go to buy something offer to convert to dollars.   I don’t pay a foreign transaction fee on my card. 

    When Emily and I were in Paris, we were often asked if we wanted to pay our bill via credit card in euros or in US dollars.  For example, if we were at a cafe and spent 30 euros, we’d get the option of seeing the bill of 30 euros converted to US dollars.

    We always paid our bill in euros because if we paid our bill in US dollars, we’d be charged a separate currency conversion fee, despite using the Chase British Airways card which had no foreign transaction fee!

    We noticed that almost all of the shops and cafes were very eager to bill us in US dollars instead of in the local currency (euros).

    The reason for that, I suspect, is the extra profit margin (3% upwards) for the merchant when you pay in your home currency (US dollars in our case) instead of in the local currency.

    This 3%+ markup to see the foreign currency converted to your home currency is in addition to the ~3% foreign transaction fee if you have a US-issued credit card which charges a foreign transaction fee.

    Dynamic Currency Conversion

    Welcome to dynamic currency conversion where you pay extra for the convenience of seeing the local currency converted to your home currency!

    The way it works is that Visa and MasterCard (but not American Express) allows their merchants to give foreign customers a choice of transaction currencies when they make a purchase.  Those choices are typically the local currency and the home currency.

    If you choose anything other than local currency, you pay a premium in addition to the exchange rate included by Visa and MasterCard and the foreign transaction fee charged by the bank which issued your credit card.

    Seeing a foreign transaction in your home currency is a benefit for many travelers who don’t like to do the math while shopping, but it will cost you 3% or more for the convenience.

    My personal view is that dynamic currency conversion is a sneaky way to squeeze extra money out of a consumer especially when overseas merchants refuse to process a transaction in local currency.

    Sure consumers like the convenience of seeing their foreign charges in the local currency, but I suspect that many wouldn’t know that they are paying extra for that convenience.

    If the overseas merchant refuses to charge you in the local currency (which is against Visa and MasterCard rules), you can include a comment in the signature line that you do not agree to the charge because it is not in the local currency and dispute the transaction when you come home.

    Bottom Line:  Always choose to view your purchases outside the US in the local currency when paying with a credit or debit card because you’ll pay 3% or higher for the convenience of viewing your bill in your home currency.
    Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)