Always Use the Home Currency Of The Country You're In At ATMs

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. 

Here's the simple rule you need to know when using a foreign ATM [TransferWise]


    It really helps to know a local - who in turn knows the exchange shops. Then take cash, and exchange it as soon as possible.
    Earlier this year, I went to Thailand. The exchange rate at the Australian airport was 26 baht per dollar. The SAME shop, in Bangkok airport, was 29 baht per dollar. My Thai wife said "Not Enough".
    Into Bangkok, and Kasikorn bank offered 31.5 baht. I was ready to exchange, but my wife took me to Super Rich Thailand where I finally got 33 baht per dollar. My ATM card was kept for emergencies, never got used.

    I use 28degrees Mastercard, I choose the local currency option, not get the ATM to convert for me, because I know that my card converts it at the wholesale Mastercard rate without any 28 degrees fees at all. The only fee is the ATM owners fee which I would have to pay anyway if the 28 degrees doesn't have a reciprocal agreement with any banks there. Take out the maximum (& keep it secure) to make the ATM owners fee worth it so you don't have to keep going back for more ATM owners fees.

    It's fairly easy to avoid interest fees on 28 degrees Mastercard, even for 'Cash Advance', just top up your balance with real money and don't go down into credit and you will not have any fees

      Word of warning for anyone looking at Bankwest's Platinum cards (to avoid foreign exchange fees):

      I was considering getting the 28 Degrees MasterCard for my world trip that I'm now 3.5 months into. Instead I went with Bankwest's (as they're my bank) Breeze Platinum card, as that also has no foreign exchange fees. Their Zero Platinum card has the same, but I went with the Breeze card for the travel insurance that comes with it.

      Sure, there are no foreign exchange fees, so I withdraw in the local currency as @simong suggested, but I get pinged with a $4 "cash advance" fee every time I withdraw, EVEN THOUGH I constantly keep the balance well above $0. It's not an "advance" at all, I'm withdrawing my own money, so this really bothers me. I contacted Bankwest about it and they've assured me when I return to Australia they'll refund all these charges, but I suspect I'm in for a shit-fight.

    It's also worth noting that overseas ATMs (and shops/hotels for that matter) will also ask you this question if you have a prepaid card that is loaded in foreign currency (eg the MasterCard Cash Passport) . If you say yes then you will have done a double exchange as well as getting the lousy DCC rate, negating any benefit of loading the card in foreign currency.

    I also found out first hand recently that some shops in Thailand have their eftpos terminals set to default to DCC so you don't even have a choice of your bank rate or their rate. When we did the sums (before accepting their rate) we would have been about 5 percent worse off with DCC.

      Yes you got to look out this for, some places try to do you the "favour" of billing you in the currency of your home country. Once such place tried to bill me in AUD, I refused to sign and said I wanted to be billed in local currency, they reversed it and re-billed in local currency.

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