Tuesday, 2 June 2020

Pay in Local Currency When Using Your Credit Card Abroad | 5 Ways to Save Money

Pay in Local Currency When Using Your Credit Card Abroad | 5 Ways to Save Money
11 Aug
10:48

Hi there, it's Ernest from Trip Astute In this video, we're going to be discussing why it's always better to pay in local currency, especially when paying with a credit card

(light chiming music) So you're traveling in Mexico and you decide to buy some souvenirs or a meal using your credit card When you hand over your card, you're asked by the clerk, "would you like to pay in pesos or dollars?" While it may seem convenient to pay in dollars, you shouldn't and here's why When you allow the clerk to process the charge in dollars or the respective currency, then you're accepting the exchange rate set by the merchant This is generally set at an unfavorable rate Merchants will often inflate the exchange rate resulting in you paying more for the item or service

If the charge is processed in the local currency, then the bank will convert the price at the standard daily rate This is generally the best rate that you will find It's also the same rate used by the ATMs, which is why you should always get your cash there rather than a currency exchange booth For more info, check out one of our earlier videos on the topic called "Getting Cash Abroad" The same rules apply for cash

You generally get better prices if you pay in the local currency, so definitely keep that in mind when given the option In addition, here are some tips to help you save money when paying for things abroad Number one: Use a credit card with no foreign transaction fee If you're using a credit card abroad, then you should be using one that does not charge a foreign transaction fee Most premium cards like the Chase Sapphire cards, American Express Platinum, and Citi Prestige card have this feature

Some issuers, like Discover and Capital One, do not charge a foreign transaction fee on any of their cards If you're unsure, then make sure to contact your issuer to verify Number two: Carry a Visa and MasterCard While many merchants are starting to accept American Express, most will only take Visa and MasterCard If you primarily use American Express, I was suggest carrying a secondary Visa or MasterCard just to be safe

Also, my experience with other cards like Discover, JCB, and Diners Club tend to have very limited acceptance while traveling, especially with smaller merchants Number three: Get an ATM card that reimburses your fees We also covered this in the "Getting Cash Abroad" video Certain banks reimburse you for any ATM fees incurred, even when abroad One such bank is Charles Schwab and their High Yield Checking Account

It's free to open and they'll reimburse all your fees I like to use it as well since it's not my primary checking account, so if it gets compromised, I won't lose all the money in my primary account I usually just load it up before my trip and keep my primary debit card with my passport in the hotel safe I'll include a link to the Charles Schwab High-Yield checking account in the video description below Number four: Break your large bills

When you get money from the ATM, you will generally get large bills This makes it complicated to pay for taxi transactions or tips I suggest asking your hotel concierge to break the bill as soon as possible or paying restaurants or merchants with the larger bills in order to get the smaller notes However, don't be surprised if smaller vendors aren't able to break your bills Number five: Download a currency exchange app when traveling internationally

It can be tough to make the conversion in your head Luckily, there are a ton of apps that you can use to make the conversion quickly and efficiently Most of these apps can pull the latest exchange rate too And those are our travel tips for this video Do you have any experiences or tips on paying in local currency? If so, please share them in the comment section below

Also, let us know if you have any questions If you enjoyed this video or found it useful, please hit the "like" button and consider subscribing It's free, and you'll get notifications on all our new updates In addition, check out our "Travel Tips" playlist for more videos like this one Until next time, travel safe and travel smart

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