Booking in your currency vs local currency

Travelling across multiple countries that use different currencies can be costly in regards to foreign currency exchange, especially when paying for things like flights and accommodation regardless if it’s online or not.

When booking online, sometimes you are given an option to pay in your foreign currency or pay in the business’s local currency – the currency of the country you are visiting or will visit.

Which currency option is the best choice for you?

Let’s look at an example to find out!

Paying in your foreign currency

I made a booking for a flight from Budapest to Kazakstan using the Hungarian low-cost airline, Wizz Air. The Hungarian currency is the Hungarian Forint (HUF). This is the local currency the company operates in as it is based in Budapest, the capital of Hungary.

I wanted to know how much I would be charged using foreign currency, using British Pound Sterling (GBP) so I selected GBP as the foreign currency for payment.

As you can see, the flight booking cost using GBP foreign currency is £99.26.

Okay, what if I wanted to use the Wizz Air’s local currency (Hungarian Forint – HUF, expressed as Ft)? Let’s see!

Paying in local currency

The total payment amount in Hungarian currency is Ft32,890.

With this amount in mind, a quick conversion from HUF to GBP at the time saw the payment to be around £93.00!

What currency would you pay in?

A straight up foreign currency payment of £99.26?

Or the local currency payment that would be less than what you would have paid for when converted to that foreign currency?

Actual payment in local currency

As you can see from the screenshot above, I paid for the flight using HUF currency and my debit card was only charged £92.92.

If you remember from the previous section, the foreign currency payment cost was £99.26.

£99.26 – £92.92 = £6.34.

I avoided being charged an extra £6.34!

This means more money to spend on delicious Hungarian foods like Lángos (Hungarian fried bread) and Kürtőskalács (Chimney cakes) haha!

Different foreign currency conversion rates

Every company and business have different foreign currency conversion rates that can be either in your favour or theirs – but most certainly always to their favour.

Whenever you are given the option, such as on an online booking website, always experiment which currency option is best for you by:

• Checking how much you would be charged paying in your own home currency.
• Checking how much you would be charged paying in the local currency.
• Check how much you would be approximately charged in your home currency when converted from the local currency. You can do this via a foreign currency app on your smartphone or on a foreign currency website (Google is quick and fast).

Check if you will be charged for foreign transactions!

Depending on which bank you are with and what kind of card you are using, you could potentially be charged with a foreign currency exchange fee on your card if you make a payment under foreign currency.

It is recommended that you check with your bank first regarding foreign exchange fees if they have any such fees.

There are increasingly a lot of banks (especially online banks) that do not charge extra fees for foreign currency exchange (along with using your card overseas and using foreign ATMs for cash withdrawals) and so I would highly recommend doing further research on finding the most suitable bank/card for your travels.

Summary

Always pay in local currency for a booking/reservation (especially online) when given the option to do so as it is often the better choice for the best possible exchange rate.

Did you find this blog post about foreign currency payment useful? Do you know anyone who is planning their travel adventures or currently travelling and wanting to avoid sneaky additional travel expenses?

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