Choosing Local Currency at Foreign POS Terminals Saves Israeli Shoppers Money

Many Israelis traveling abroad fall into a common payment trap by selecting to pay in US dollars or euros at point-of-sale terminals instead of the local currency. This option often appears when paying by credit card in stores, restaurants, hotels, or service counters. The mechanism, known as Dynamic Currency Conversion (DCC), allows the local payment provider to convert the currency at the time of the transaction rather than letting the card issuer handle the conversion later. However, this conversion often uses unfavorable exchange rates and may include hidden fees, causing even cardholders with zero foreign currency fees to pay more.

An internal review by Bank ONE ZERO found thousands of Israeli customers abroad chose to pay in dollars or euros in countries where those are not the official currencies, thereby forfeiting their foreign currency benefits. The simple consumer rule is to always select the local currency, such as the zloty in Poland, koruna in the Czech Republic, forint in Hungary, baht in Thailand, and pound in the UK. Choosing the local currency leaves the conversion to the card issuer or bank, which usually offers better rates and preserves card benefits.

Therefore, when faced with a choice at a foreign payment terminal, travelers should avoid the seemingly familiar currency option and opt for the local currency to save money and retain their card advantages.