When a terminal or the desk offers to charge you in your home currency, that is dynamic currency conversion, a service with its own exchange rate and mark-up.
- EU rules require the conversion charges to be shown as a percentage mark-up over the European Central Bank rate before you pay, and you can refuse and pay in the local currency instead.
- Compare the rate before you choose, also for later charges like damage or fuel.
The terminal shows two buttons: "EUR 412.00" or "GBP 361.27, guaranteed rate". It looks helpful, because you see the amount in your own money. That second option is a conversion service with its own rate and mark-up, and you are free to say no. For a rental car, the choice affects more than one payment: the rental, the deposit and any later charges can all go through it.
What dynamic currency conversion is
Dynamic currency conversion, or DCC, means the merchant's side converts the amount into your card's currency at the moment of payment, instead of your own bank doing it later. The merchant or its payment provider sets the rate and adds a margin.
At a rental desk, DCC can appear:
- on the payment terminal when you pay the rental;
- in the contract, as a box for the currency of charges;
- on later charges, such as fuel, fines or damage, if you agreed to conversion at the start.
What EU rules require
Regulation (EU) 2019/518 changed the EU rules on cross-border payments to make conversion charges transparent. According to the Central Bank of Malta's summary, for card transactions at a point of sale or ATM involving currency conversion:
- total currency conversion charges must be expressed as a percentage mark-up over the latest euro reference rates of the European Central Bank;
- this must be disclosed before the transaction starts;
- you have to be told that you can pay in the currency of the payee instead.
The regulation's recitals add that you should be able to refuse the conversion service and pay in the payee's currency, that the amounts should appear on the receipt or another durable medium, and that card issuers should remind you of their own conversion charges by electronic message when you pay in another currency.
| Before you pay, you should see | Why it matters |
|---|---|
| The amount in the local currency | The real price |
| The amount in your card currency | What DCC would charge |
| The mark-up over the ECB rate, as a percentage | Lets you compare with your bank |
| The option to pay in local currency | Your right to refuse |
How to choose
- Know your card's own fee. Many cards charge a percentage on foreign payments; some charge none. Check your card terms or app before you travel.
- Look at the mark-up the terminal shows. If it is higher than your card's fee, paying in local currency is usually cheaper.
- If no mark-up is shown, ask. If staff cannot tell you, choose the local currency.
The contract box for later charges
Some rental contracts include a currency choice that applies to everything charged later. ECC France stresses a basic rule for any contract at the desk: do not sign a contract you do not understand, and keep a copy. If you see a currency box, check which currency is ticked. Our article on extra insurance at the desk explains how to read the contract line by line, and the terms check helps you find the clause.
Deposits and currency
A deposit blocked in your home currency through DCC can be released at a different rate than it was blocked, which can leave a small difference on your statement. If a gap appears after release, compare the amounts and ask your card issuer how they were converted. Read how a rental car deposit works.
Later charges: check the currency too
When a damage, fuel or fine charge arrives after your rental, check:
- the currency on the company's invoice;
- the currency and amount on your card statement;
- whether a conversion mark-up was added on top.
If the charge itself is disputed, the currency question comes second. First follow what to do when a rental company charges your credit card, and check the chargeback deadline with the deadline calculator.
A worked example
Say you rent in Stockholm and the rental costs 4,650 Swedish kronor. The terminal offers to charge you in euros and shows a mark-up of 6 percent over the ECB rate. Your own card charges 1 percent for foreign payments. In this example, paying in kronor and letting your bank convert is about 5 percent cheaper, roughly 20 euros on this payment alone. The numbers here are only an illustration; the point is that the terminal must show you the mark-up so you can make this comparison yourself.
Checklist at the desk
- Before you travel, note your card's fee for foreign payments.
- At the terminal, look for the amount in local currency and the mark-up percentage.
- Choose the local currency unless the mark-up is lower than your card's fee.
- Check the contract for a currency box for later charges.
- Keep the receipt; it should show both amounts.
Outside the euro area, inside the EU
The same disclosure rules apply when you pay in Swedish kronor, Danish kroner, Polish złoty or Czech koruna at a desk in the EU. Compare the terminal's mark-up with your own card's fee in the same way.
Frequently asked questions
Which is usually cheaper: local currency or home currency?
It depends on your card's own conversion fee and the rate the desk offers. The EU rules exist so you can compare: the terminal must show the mark-up over the ECB rate. Many travellers find that paying in the local currency and letting their own bank convert is cheaper, but check your card's fee.
Does this apply in the UK or Switzerland?
The EU regulation applies to payments in the EU. Outside the EU, terminals may still offer conversion, but the disclosure rules can differ. The basic advice stays the same: ask for the rate and compare.
Can a later damage charge be converted too?
Yes. A charge made after your rental can also be processed in your home currency if you agreed to that at pick-up. Check the currency on your statement and on the company's invoice.