Pay in local currency or in dollars with a credit card in Peru?

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The general consensus on this site is that it's probably in your favor to pay in local currency and allow your card issuer to do the conversion, rather than allow the local vendor or their payment network to do it for you - their only relationship with you is for this single transaction, whereas your card has some incentive to give you a more favorable rate to keep you as a customer. (Clearly, some issuers will give better rates than others, so it's worth it to make sure that yours is at least in a fair range).

I always use my US credit card and pay in GBP when given the choice vs USD while traveling in the UK, and checking the exchange rates when I get home I have always found that my issuer (Capital One, if it matters) has given me a rate very close to the even middle exchange rate.

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Paying by credit card while overseas cheaper in US dollars or in the local currency?

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But I am really looking for people who went through it and did the math upon their return.

It depends on your debit/credit cards. As Danny mentions, typically it's financially preferable to use local currency with your credit card (I confirm it is also typically the case in Peru). If you don't want to do the math each time, you can use a card using currency exchange market rate and without international fee.

Upvote:1

I've never, ever seen a payment terminal that gave you a better exchange rate than your home bank. Worst I've seen in a bank is a 3.0% spread compared to the central bank's rate, while the terminals will give you 5% on a good day. So always decline paying in your home currency and pay in the local currency instead.

Dynamic currency conversion (DCC) is a massive worldwide scam that's just waiting to be banned or regulated by the financial authorities. Avoid it like the plague.

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The Visa exchange rate is pretty close to the market rate. If your bank doesn't screw you by adding a conversion fee (which is often undisclosed), then you should use local currency.

Otherwise, you should find out what your bank's fee is and how much the local bank's fee is. If my experience in Spain is any guide (a very big IF), the local bank's charge is worse, and some ATMs won't reveal what it was until after you receive the cash. And if your bank isn't entirely upfront, you have to make a transaction in local currency and then find out what your bank converted it to in your currency. For many banks, the exchange rate changes many times a day, but the Visa rate (which my bank uses) changes only once per day.

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