Should I pay in local currency or pounds (GBP) when I use Monzo abroad?

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When you use your debit card when you’re abroad, to take out cash at an ATM or pay at a shop or restaurant, you’ll usually see the option to pay in either the local currency or in pounds.

But which one should you choose?

If you use Monzo, you should always choose to pay in the local currency

When you use your Monzo card abroad, we pass Mastercard’s exchange rate directly onto you. We don’t add any extra fees or charges when you pay with your card. 

If you want to withdraw cash from ATMs abroad, you can take out £200 for free every 30 days. And after that, we’ll charge you 3%.

To make sure you get the Mastercard exchange rate when you’re using Monzo, always choose to pay in the local currency.

This means we’ll convert your money at the Mastercard exchange rate, instead of the shop or ATM doing it at their own rates, which can end up costing you more.

How do I check the exchange rate?

You can see the current exchange rates on the Mastercard website:

  • Open Mastercard’s Currency Conversion Calculator

  • Choose the currency you want to convert to

  • Enter a ‘Transaction Amount’ (write ‘1’ if you just want to find out the rate)

  • Type ‘0.00%’ when you’re asked to enter the ‘Bank Fee’

  • And choose Great British Pound (GBP) as your ‘Card Currency’

  • Tap ‘Calculate’ to see the current exchange rate!

The rate you see is the one we pass directly on to you.

Just remember, we'll use the exchange rate at the time the transaction settles (usually a few days after you make it), rather than the one you see at the time you actually make the transaction. Read this short guide to learn about how transactions work.

You can check how the Mastercard rate measures up to other exchange rates by using Visa’s exchange rate calculator, a currency converter like XE or Reuters, or by giving it a Google!

Why does paying in pounds cost me more? 

When you choose to pay in GBP, the shop or ATM will convert your payment into pounds using a service called ‘dynamic currency conversion’ (DCC). 

When they convert your payment, they can choose the exchange rate they use to make the conversion. 

If you choose to pay in GBP, you’ll definitely know exactly how much you’ll be paying in pounds when you make the payment. But in most cases, you’ll end up paying more. 

That’s because the shop or ATM and their bank typically offer you a worse exchange rate, and split the profits they make between them.

Should I always pay in local currency? Even when I use other cards?

It’s usually best to pay in the local currency to avoid these extra markups, whatever card you're using. But it’s worth double-checking. 

If you’re using other debit cards abroad, paying in local currency might not necessarily help you get the best rate. It depends on the exchange rate and markups other banks might add. So you should find out what they offer and confirm that paying in the local currency will end up cheaper.

Find out more about travelling with Monzo, and download Monzo today to get the Mastercard exchange rate and spend with your card for free when you're abroad ✈️