Dynamic currency conversion
Some shops, restaurants and cash machines abroad now offer a service called Dynamic Currency Conversion, or DCC. This means that when paying by card you are given the option of either paying in the local currency, which will debit your account using the exchange rate offered by your card company – or having the transaction converted into your home currency there and then by the shop or the restaurant.
Paying in your home currency can be useful for knowing exactly how much will appear on your statement when withdrawing cash at a cash machine or paying for goods or services abroad.
However, you should always be careful that the exchange rate used in the conversion is competitive, as the exchange rate used by the retailer may not be as competitive as the rate offered by your card company. If a retailer is operating Dynamic Currency Conversion you should still always be able to choose the currency of the country you are in. If you are in any doubt ask to pay the bill in the local currency.
Always keep receipts and check them against your statement once you are back.