On overseas vacation you often get the choice to pay in local currency or Norwegian kroner when using cards. If you choose wrong it can cost you dearly, consumer portal Dinero.no writes.
Imagine that you need to withdraw a few hundred euros from your bank account while on holiday. While are by the ATM, ready to complete the transaction, you get the question, “NOK or euros?” – But what are you going to respond?
Local currency more profitable
Many Norwegians who are faced with this choice,choose the known and safe currency Norwegian kroner. However, what you don’t get to know is that the owners of the ATM or terminal determines the costs of the currencies themselves, which means that you get far less money back if you choose Norwegian kroner than if you choose the local currency.
– We advise anyone going on holiday abroad this summer to stick with the local currency when you get this question during your cash withdrawals and card payments. If you do not consent to this, the exchange rate will in most cases prove to be much more expensive, Anders Fagereng, general manager of the consumer portal Dinero.no, says.
VISA and MasterCard’s exchange rates are better
The high fee used by restaurants, stores or ATMs for currency conversions exist primarily for them to protect themselves against currency fluctuations. This way they avoid losing money by exchanging currencies such as Norwegian kroner. At the same time this may cause your stay to prove more expensive than it otherwise would have been.
But if you select local currency, like US dollars in the US or British Pounds in England, payment suppliers such as VISA and MasterCard will determine the exchange rate, depending on which card you use. This rate is more realistic and highly competitive compared with the local actors’ own foreign exchange costs.
You can save thousands of kroner
Next time you withdraw money abroad, it may be worth noting currency proposal the various ATMs submit if you wish to withdraw in Norwegian kroner.
The consumer Portal Dinero.no has even investigated which factors are decisive when withdrawing cash. We then found out the exchange rate offered by an an ATM in Denmark when we wanted to withdraw 4,000 Danish kroner. Withdrawing money in Norwegian kroner would cost us over 5,500 kroner, versus 5,142.45 kroner if we chose the local currency. The rate offered when choosing the local currency was almost identical to the current rate of exhange , and several hundred kroner cheaper. If you are on holiday 14 day the difference in the amount of money you get from such withdrawals, depending on whether you use the local currency or Norwegian kroner, amounts to several thousand kroner in total.
– If people are aware of this difference, they can potentially save a lot of money which they can spend on activites and purchases at their holiday instead, Fagereng says.
Source: dinero.no / Norway Today