When you use your debit card when you’re abroad, to take out cash 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, paying in the local currency could save you money
When you use your Monzo card abroad, we pass Mastercard’s exchange rate directly onto you. And we don’t add any extra fees or charges when you pay with your card.
To get the Mastercard exchange rate when you’re using Monzo abroad, choose to pay in the local currency. This means we’ll convert your money using the Mastercard exchange rate.
If you pay in pounds, the shop or cash machine will convert your money using their own exchange rate, which could end up costing you more.
If you're using Monzo more as a bank than a spending account or have Monzo Plus, there’s no fee to take out cash in the European Economic Area (EEA), including the UK. Outside the EEA, you can take out up to £400 for free every 30 days. After that, we charge a 3% fee.
If you're not using Monzo more as a bank than a spending account or subscribed to Monzo Plus, you can take out up to £250 every 30 days in the EEA for free, including the UK, with a 3% charge after. Outside the EEA, you can take out up to £200 for free every 30 days. After that, we charge a 3% fee.
We'll remind you that you could save money by paying in the local currency
If you pay in pounds while you're abroad, we'll let you know that you could save money by paying in the local currency.
This isn't always possible, as it depends on the information we get about your transaction. But when we can, we'll send you a reminder along with your transaction.
If you tap into a transaction you made in pounds while you were abroad, we'll also show you more information about exchange rates, and explain how you could save yourself money when you're abroad.
Why could paying in pounds cost me more?
When you choose to pay in GBP when you're abroad, the shop or cash machine 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. And in many cases, you’ll end up paying more.
That's because the shop or cash machine and their bank often make money by offering you a worse exchange rate.
Should I always pay in local currency? Even when I use other debit cards or bank accounts?
It’s often best to pay in the local currency to avoid these extra markups, whatever debit 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 your bank and debit card providers might add. So you should find out what they offer before deciding if paying in the local currency would end up cheaper.
How do I check the exchange rate?
You can see the current Mastercard 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!
When you use Monzo abroad, we’ll convert your money using the Mastercard exchange rate.
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 make the transaction. Read this short guide to learn about how transactions work to find out more.
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 ✈️