If your credit card doesn’t charge foreign transaction fees, you’re already a step ahead in saving money while traveling! But even if you do pay a foreign transaction fee, or if you're not sure, the choice between paying in local currency or U.S. dollars matters.

Paying in Local Currency is your best bet. Without extra fees from your card issuer, you’ll benefit from fair exchange rates set by your credit card network—Visa, Mastercard, or Amex—which are usually better than the converted dollar amount offered by merchants.

Paying in U.S. Dollars (Dynamic Currency Conversion) still usually comes with a poorer exchange rate set by the merchant or payment processor. Even when your card is fee-free internationally, that rate can make your purchase more expensive.

Bottom line: opt to pay in the local currency whenever possible to get the best value and stretch your travel dollars further.  And don't forget to let your credit card companies know of your travel plans ahead of time. This can save you precious time by avoiding a freeze on your card from fraud alerts.  

Spend your time traveling, not on the phone with the bank!