Save on Credit Card Spending Abroad: Choose the Right Currency When You Pay

Save on Credit Card Spending Abroad: Choose the Right Currency When You Pay

When travelling overseas, one small choice at the payment terminal could help you avoid unnecessary conversion costs: choosing the local currency instead of AED when paying with your credit card.

At shops, restaurants, hotels and even ATMs abroad, you may be asked whether you want to pay in AED or the local currency. While AED may feel easier because you immediately recognize the amount, it can come with an additional currency conversion markup set by the merchant or its payment provider.

Choosing the local currency means you decline the merchant’s conversion and allow the transaction to go through your card’s usual currency conversion process instead.

So, when travelling, remember this simple rule:

If you are given the choice between AED and the local currency, choosing the local currency can help you avoid the merchant’s currency conversion markup.

International transaction fees and other applicable card charges may still apply.

How to Pay in the Right Currency When Travelling

When you are ready to pay abroad, follow these simple steps:

1. Check the currency shown on the payment terminal.
   Before tapping your card, entering your PIN or approving the payment, check whether you are being asked to pay in AED or the local currency.
2. Choose the currency of the country you are visiting.
   For example, select EUR when paying in France, GBP in the UK or USD in the United States.
3. Decline the merchant’s currency conversion if offered.
   You may see wording such as “Pay in AED”, “Convert to AED” or “Guaranteed Exchange Rate”. If you want the transaction processed in the local currency, decline this conversion option.
4. Check the amount before confirming.
   Make sure the terminal shows the local currency you selected before you approve the transaction.
5. Keep your receipt and review your statement.
   The receipt should show the currency in which the transaction was processed. You can then compare it with the amount reflected on your credit card statement.

Why Paying in AED Abroad Can Cost More

The option to pay in AED abroad is commonly provided through Dynamic Currency Conversion (DCC).

DCC allows a merchant, hotel, restaurant or ATM operator to convert the purchase into your card’s home currency at the point of payment.

When you choose AED through DCC, the exchange rate is set by the merchant or its conversion provider and may include an additional markup or conversion charge. This means the convenience of seeing the final amount immediately in AED can come at an additional cost.

Visa notes that DCC offers should disclose the exchange rate and any additional fees or markup, and the cardholder should be given the choice to accept or decline the conversion.

What Happens When You Choose the Local Currency?

When you choose the local currency, the transaction is submitted in the currency used at your destination.

For example:

• A EUR 100 restaurant bill in France is submitted as EUR 100
• A GBP 200 hotel payment in London is submitted as GBP 200
• A USD 50 purchase in New York is submitted as USD 50

The foreign-currency transaction is then converted into AED through the process applicable to your credit card.

The important difference is therefore not whether currency conversion takes place – it usually will – but who performs the conversion and determines the exchange rate.

An online currency converter can help you estimate the AED equivalent before paying, although the final amount on your statement may differ based on the applicable exchange rate and card charges.

A Simple Example

Imagine your restaurant bill in France is EUR 100.

At the payment terminal, you are offered:

Option 1: Pay EUR 100
The transaction is submitted in euros and converted through the process applicable to your card.

Option 2: Pay the displayed AED amount
The merchant converts the EUR 100 into AED using the exchange rate offered through its DCC service.

Both options pay for exactly the same meal, but the exchange rate and conversion cost may be different.

This is why simply seeing an AED amount on the terminal does not necessarily mean it is the cheaper option.

Does Paying in AED Avoid International Transaction Fees?

No. Choosing AED while you are abroad does not necessarily make the purchase a domestic transaction or remove international transaction fees.

For Deem Credit Cards, international transaction fees apply to overseas purchases made in both AED and non-AED currencies under Deem’s current Schedule of Fees and Charges.

This means that selecting AED could result in accepting the merchant’s currency conversion in addition to the applicable international transaction fee on your card.

Before travelling, check the latest Schedule of Fees and Charges and your Credit Card Key Facts Statement so you understand the charges that may apply.

Using Your Deem Credit Card for Travel Spending

Your Deem Credit Card can be used for purchases in the UAE and overseas.

If you have selected JOY as your rewards option, eligible card purchases can also earn Joy Points.

For customers who select Travel as their JOY category, eligible spending categories include airlines, hotels, dining and international spends. Accelerated Joy Points may apply once the relevant monthly spend criteria for the card are met, subject to the applicable program terms, eligible merchant categories and monthly caps.

So while travelling, using your card can allow you to:

• Pay without carrying large amounts of cash
• Earn Joy Points on eligible purchases
• Earn accelerated Joy Points on eligible Travel-category spending where applicable
• Keep track of your transactions and statements through the Deem App

Rewards should always be considered alongside the total cost of the transaction, including any applicable international transaction fees or currency conversion costs.

You can review the latest Deem Credit Card features and rewards here, with earning criteria, exclusions and caps subject to the applicable Terms and Conditions.

What About ATMs Abroad?

ATMs overseas may also ask whether you want your withdrawal converted into AED.

If you want to decline the ATM operator’s currency conversion, select the local currency or an option such as “without conversion”, depending on how the ATM presents the choice.

Be careful with the wording on the screen and check your selection before confirming.

Remember that declining currency conversion does not remove other charges that may apply. The ATM operator may charge its own withdrawal fee, while cash advance fees and applicable finance charges may also apply to credit card cash withdrawals.

For this reason, always review the applicable charges before using a credit card to withdraw cash overseas.

What About Online Travel Purchases?

The same principle can apply when booking hotels, flights or other purchases online.

A website may show you prices in AED for convenience or give you an option to convert a foreign-currency amount into AED at checkout.

If it is an optional currency conversion, check:

• The original transaction currency
• The exchange rate being offered
• Any conversion markup or fee
• The final amount you will pay

An international transaction billed in AED may still attract an international transaction fee, so AED should not automatically be treated as the cheaper option.

Your Travel Payment Checklist

Before you travel:

• Check your credit card’s international transaction fees
• Understand how your rewards program works for overseas spending
• Review the applicable card terms and charges

When you pay:

• Check the currency
• Choose the local currency where appropriate
• Decline optional AED conversion if you do not want DCC
• Confirm the currency before approving the payment
• Keep your receipt

After you pay:

• Review the transaction in your statement
• Keep track of your overall travel spending
• Plan your repayment so your rewards and travel benefits are not outweighed by avoidable finance charges

Travel Smarter With Your Deem Credit Card

Using your credit card abroad can be convenient and rewarding, but understanding the currency choice at checkout can help you manage the cost of your travel spending.

When offered a choice between AED and the local currency, selecting the local currency can help you avoid the merchant’s currency conversion markup, while your transaction remains subject to the exchange rate and international transaction charges applicable to your card.

And when you use an eligible Deem Credit Card with JOY Travel selected, your eligible travel and international purchases can also contribute towards earning Joy Points, subject to the applicable program terms.

A few seconds spent checking the currency before you tap or pay can help you make a smarter choice while travelling.

Frequently Asked Questions

1. Should I choose AED or the local currency when paying abroad?

Choosing the local currency is generally the better starting point because it allows you to decline the merchant’s Dynamic Currency Conversion and avoid its potential conversion markup.

Your transaction will still be subject to the exchange rate and any applicable international transaction fees charged on your card.

2. Why does the payment terminal offer me AED?

The merchant may be offering Dynamic Currency Conversion (DCC), which converts the purchase into your card’s home currency at the point of payment.

The exchange rate and any markup are determined by the DCC provider rather than through your card’s usual foreign-currency conversion process.

3. Does choosing local currency mean there are no fees?

No. Choosing local currency can help you avoid the merchant’s DCC conversion markup, but international transaction fees and other applicable card charges may still apply.

4. Will my Deem Credit Card statement still be in AED?

Yes. Deem Credit Cards use AED as the card currency. A purchase made in another currency will ultimately be reflected in AED on your card account following the applicable conversion process.

5. Can I earn Joy Points on my spending abroad?

Eligible purchases made using a Deem Credit Card can earn Joy Points when JOY is selected, subject to the program terms.

Customers who select Travel as their JOY category can earn accelerated rewards on eligible categories including airlines, hotels, dining and international spends when the applicable monthly spend requirements are met.

6. What if the merchant already selected AED for me?

Check the payment terminal before approving the transaction and ask the merchant to process it in the local currency if that is your preferred choice.

Card-network rules require DCC to be presented as a choice rather than selected on the cardholder’s behalf.

7. Where can I check Deem’s overseas transaction charges?

Refer to Deem’s latest Schedule of Fees and Charges and your Credit Card Key Facts Statement before travelling. Charges and terms may change, so always refer to the latest published information.