Travelling to a new country and dealing with exchange rates is always a bit confusing, but one absolute rule online money transferring site TransferWise notes is that you should always take money out of the ATM without converting it.
It seems simple enough, but ATMs make the language very enticing with words like “This ATM offers conversion to your home currency.” That sounds great, but it’s a bad idea. TransferWise says to stick with the country you’re in:
When [and ATM] asks which currency to charge you in, there’s only one right answer… In the Eurozone, that answer is Euros. In Sweden, Swedish Krona. In Britain, Pounds. Always, always, always choose to be charged in the local currency of the country you’re in. If a Spanish ATM asks if you want to be charged in GBP, say no. Don’t let the machine do your currency conversion.
Why? Having currency converted is filled with hidden charges. TransferWise explains:
But in reality, paying in your home currency is hidden-fee-hell — a scam that goes by the name of Dynamic Currency Conversion (DCC). You’re effectively asking a foreign ATM provider or bank to gleefully make up an exchange rate for you. And the only thing more likely to screw you over than your bank, is a foreign bank.
Essentially, currency conversion at a foreign ATM will always cost you more, even if it sounds helpful. The one rule here is simple: always choose to be charged in the currency of the country you’re in. Head over to TransferWise for a bunch of examples of the hidden fees.