Savvy travelers already know that you’ll pay a premium if you pay with US Dollars (USD) when traveling abroad. If you haven’t experienced this yourself, you eventually will when you buy something from a local, international merchant. At check out, they may ask whether you’d like to pay in USD, and avoid the hassle of credit card international transaction fees. The problem is, for a typical retail merchant, and we’ve seen this with small merchants as well as larger ones like Harrods in the UK, you’ll end up paying a significant premium if you charge in USD. Read on to find out why you may not want to want pay in USD when booking flights abroad.

Using USD for online transactions can also cost you more as we have seen time and again when booking flights abroad. When booking our recent flights though AirAsia, we would have paid $155.52 if we paid in US Dollars.

Travel AirAsia Exchange Rate - Booking Flights Abroad

Those same tickets, purchased in Malaysian Ringgits (AirAsia is a Malaysian company), cost 572 MYR or 147.14 USD. Paying in USD would have incurred a 5.7% surcharge (155.52 – 147.14 / $147.14) = 8.38 / $147.14. We could spend $8.38 less just by paying in a different currency. Given that current bank interest rates are below 1%, a +5% savings can have significant impact over time, especially if you travel a lot.

Travel AirAsia Exchange Rate MYR - Booking Flights Abroad AirAsia exchange Rate CC - Using USD

UPDATE | Saving +20% Booking Flights Abroad

Here’s a recent booking we made using AirAsia Bangkok to Ho Chi Min City. The price we saw for the flights depending on the currency we used for purchase. The fare in US Dollars was $47.80. Fare in Malaysian Ringgit equalled 166.45 or $41.78 USD. Our fare booked using Thai Baht came to 1390 THB or 39.56 USD. Of course, we booked in Thai Baht. We spent $8.24 less per ticket than if we had booked using Malaysian Ringetts or US dollars which represented a 20.8% savings. $8.24 x 4 people = $32.96. In this part of the world, $32.96 will buy our family of four a very nice dinner!

Fare - Using USD

Fare USD - Booking Flights Abroad

USD Fare Price = $47.80.

Fare MYR USD - Booking Flights Abroad

Malaysian Ringett Fare Price = 166.45rm or 41.78us

Fare BHT - Booking Flights Abroad

Thai Baht Fare Price = 1390 or 39.56us

Fare_BHT_USD

Spend Less and Travel More

My grandma - Booking Flights Abroad

Me with my grandma.

The best approach when spending abroad is to pay in local currency using a credit card that doesn’t charge foreign transaction fees. An better approach is to use a card that doesn’t charge foreign transaction fees and also gives cash back rewards.

I once asked my grandma why she bothered clipping a ten cent coupon for a one dollar can of Campbell’s soup. It was just one dollar after all and I knew she wasn’t exactly strapped for cash. My question elicited an almost horrified response from my Grandma and she said,

If you can save 10% on every purchase, imagine that over a lifetime!

x0- Bar

Barbara de Briere is a Writer, Technologist, Zero Waste Revivalist, and Worldschooler currently on a global adventure, mixing Health, Happiness, and Play with a bit of saving the world. Feel free to connect virtually via LinkedIn, Instagram, through www.InfoMiss.com or in person when you are abroad.

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