More and more people are starting to head out on their much-anticipated summer vacations and if you’re one of them, make sure you read this money-saving tip before you go! The tip comes from reader Mark B. who left some great advice in a comment on this story: Always Do This Before Checking Out of Your Hotel

Mark wrote, “Over the years we have found some hotels, car rental companies and restaurants will try to bill you in USD rather than in the local currency. To avoid terrible exchange/conversion rates, always request the bill be in local currency as your credit card company uses better conversion rates than the establishment trying to gouge you by having you accept payment in USD.”

Mark is absolutely right and I’ve written similar advice about stores but never hotels. But with so many Americans traveling internationally again, it’s an important reminder so here it is again.

There’s a dirty little trick that many vendors play around the world to make more money from you when you shop. After you swipe, insert or tap your credit card or tap your phone to pay for something, a salesclerk or the machine will ask if you want to pay in U.S. dollars or the local currency.

Paying in U.S. dollars might seem to be the smarter and more convenient option but it’s not. In fact, it’s a total rip-off, since the retailer will charge a higher exchange fee than your bank back home does. So always pay in the local currency of the country you’re in. The same goes for ATM machines as my buddy Zach Honig pointed out in a recent Instagram post. As Zach says: He saved $70 by tapping one button (decline conversion).


View this post on Instagram


A post shared by @ZachHonig (@zachhonig)

Travel guru Rick Steves echoes this advice in a recent Facebook post, where he talks about ATMs in Europe. He says: “Europe’s ATMs are getting greedier and trickier. I’ve long advised travelers using a credit card to make purchases overseas to just say no to offers, made as if doing you a favor, “to be charged in US dollars.” This is usually just a way for the merchant’s bank to impose a bad exchange rate and make a bit of extra profit off of you. (It’s best to say, “No, bill me in the local currency.”) A few years ago, I noticed that some ATMs also seemed to be pulling this for cash withdrawals — and now, I’m seeing that happen even at bank-run ATMs. What’s with this, and what other pitfalls should travelers be mindful of when choosing an ATM, withdrawing money at an ATM, or using their credit card at merchants?”

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8 Comments On "Should You Pay in US Dollars or Local Currency When Traveling Abroad? Here's How to Avoid Getting Ripped Off"
  1. Ted Eckman|

    Hi Johnny,

    The link to the ATM video doesn’t seem to work. Just an FYI.


    1. Johnny Jet|

      Hi Ted,

      It works for me. Maybe try a different browser or you have to be logged into Instagram?

  2. Doug Copeland|

    If you decline conversion at the ATM will you still get the money? How will you know the conversion rate?

    1. Johnny Jet|

      Yes, you will still get the money. You’re just declining the ATM’s conversion to USA. You want your bank’s conversion

  3. jesse|

    Hi,Im going to quebec,so when i book a room from the states on there webside,do i pay dollars or canadian on my charge card,i listen to evry saturday on the tech guy.ths jesse

    1. Johnny Jet|

      Good question. If the website is in the U.S. pay US Dollars but if it’s in Canada pay in CAD


    Were would I go to get conversion of cash at lowest cost?

  5. Terry|

    Please add “make sure your preferred credit cards don’t have foreign transaction fees”. Frequent travelers do this automatically. Also, if you have time before your trip this is a great time to apply for a new card ( with no FTFee), and a great sign up bonus. Chances are you will spend enough to earn/get close to earning that bonus. Thanks for all your help over the years

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