What currency or card do you pay with? What is the real cost?

Dynamic Currency Conversion (DCC) allows consumers to pay in their home currency instead of the local currency when making purchases abroad. While it may seem convenient, DCC often comes with unfavorable exchange rates and additional fees, leading to higher costs for the consumer.
Websites and Services with Unfavorable DCC:

• Booking Platforms: Some online travel agencies and booking platforms offer DCC during the payment process. Opting to pay in your home currency through these platforms can result in less favorable exchange rates and additional fees. It's advisable to pay in the local currency and allow your bank to handle the conversion.
• Point-of-Sale Terminals: When making purchases abroad, some merchants' card terminals offer the option to pay in your home currency. Choosing this option can lead to higher costs due to poor exchange rates and service fees. Always select the local currency to avoid these extra charges.

Websites and Services with Favorable Currency Conversion:

• Banks and Credit Card Issuers: Many banks and credit card companies provide currency conversion services with competitive exchange rates and lower fees compared to DCC. Using cards that do not charge foreign transaction fees can be more cost-effective.
• Currency Exchange Services: Specialized currency exchange services often offer better rates and lower fees. For example, platforms like Revolut provide real-time exchange rates with minimal fees, making them a favorable option for currency conversion.
  

Recommendations:

• Avoid DCC: When presented with the option, always choose to pay in the local currency to prevent unfavorable exchange rates and additional fees associated with DCC.
• Use Favorable Services: Utilize banks, credit cards, or specialized currency exchange platforms that offer competitive rates and low or no foreign transaction fees.
• Research Before Traveling: Investigate your bank's or card issuer's policies on foreign transactions and consider obtaining a card that does not charge foreign transaction fees to save money during your travels.

By being aware of how DCC works and choosing the right payment methods, you can avoid unnecessary costs and make more economical decisions when spending abroad

One  example  :    Booking.com

Paying in your own currency instead of the local currency through services like Booking.com often incurs additional costs due to currency conversion fees and less favorable exchange rates. Here’s a detailed breakdown:

1. Currency Conversion Fee from Booking.com:
   • When you choose to pay in your own currency, Booking.com uses "dynamic currency conversion," where they set the exchange rate.
   • The exchange rate applied is typically less favorable than the average market rate.
   • Additional costs can range from 2–5% above the actual exchange rate.
2. Bank or Card Issuer Fees:
   • If you pay in the local currency, your bank or card issuer typically applies a currency conversion fee, usually around 1–3%.
   • In many cases, this cost is lower than what is charged by dynamic currency conversion services like Booking.com.
3. Difference in Cost:
   • Paying through Booking.com's currency conversion could cost you up to 4–6% more compared to paying in the hotel’s local currency and letting your bank handle the conversion.

Recommendation:To minimize costs:

• Always choose to pay in the hotel’s local currency.
  This allows your bank or card issuer to apply a better exchange rate.
• Use a bank card with no currency conversion fees.
  Some credit or debit cards offer exchange rates close to the market rate without additional fees.

There are several bank cards and credit cards without currency conversion fees that can be beneficial when traveling abroad or making purchases in foreign currencies. Here are some recommendations:

Revolut Standard Card:

• A free debit card with no foreign transaction fees up to a certain limit per month.
• Offers free currency exchange up to 10,000 SEK per month and two free ATM withdrawals up to 2,000 SEK per month.
• Note that limitations may apply depending on the day of the week or transaction amount.

Collector Easyliving Credit Card:

• A credit card without foreign transaction fees and an annual fee of 195 SEK.
• Offers up to 56 days of interest-free credit and includes travel insurance with cancellation protection when paying for your trip with the card.

Northmill Bank Debit Card:

• A debit card with no currency conversion fees and no annual fee.
• Offers 2% interest on deposited funds and supports Google Pay and Apple Pay for convenient payments.

Lunar Standard Card:

• A prepaid card with no currency conversion fees and no annual fee.
• Offers free withdrawals up to a certain amount per month and includes a user-friendly app for expense management.

P.F.C. Freemium Card:

• A free prepaid card with no currency conversion fees and no annual fee.
• Offers free ATM withdrawals up to 1,000 SEK per month and supports both Google Pay and Apple Pay.

I use Revolut myself and it is very beneficial as I pay for hotels and flights in the local currency without exchange fees.
If you want help with acquiring Revolut and get even more tips on how to benefit from Revolut, please contact me about this.
If you read this blog and get Revolut through my link, I will receive a signing bonus that I will share 50/50 with you.
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