When a payment terminal or ATM offers to convert a transaction into the cardholder’s home currency, an apparently helpful option may carry an unadvertised cost. The travel consumer in Europe faces a small set of recurring mechanisms that produce exchange-rate related losses: dynamic currency conversion, merchant markups, weekend or out-of-market-hour surcharges, ATM access and withdrawal fees, and issuer-level foreign transaction fees. The practical effect is predictable: two euros converted by the merchant can cost more than two euros converted by the cardholder’s bank or card network. The scale of the phenomenon can be large. “British consumers traveling abroad are being charged £500 million every year in dynamic currency conversion fees.” (Bankrate)
How exchange-rate costs are presented and where the money goes
Three methods appear most often at point of sale or at ATMs:
- Dynamic currency conversion (DCC). Merchants or ATM operators offer to bill in the customer’s home currency, using their own conversion rate and an added margin. That margin is the merchant’s revenue. Visa requires merchants and ATMs to display the exchange rate and any markup and states that “if you don’t see the required details or feel pressure to choose one currency over the other, Visa recommends that you decline the currency conversion offer and report the incident to your card issuer.” (Visa)
- Card-issuer markups and network surcharges. Some issuers impose a percentage foreign transaction fee or a non-transparent conversion margin. Fintech providers have reduced this problem by promising mid-market rates, but exceptions remain: weekend or out-of-market-hour markups are sometimes applied. “Depending on your plan, you may be charged a fee on all exchanges made outside of the foreign exchange market hours between 5pm Friday and 6pm Sunday, Eastern Time (ET). For Standard customers, this fee is 1%.” That statement is published by one leading fintech provider. (Revolut)
- ATM and merchant add-ons. Independent ATM networks may present a DCC prompt, and individual merchants may quietly add a surcharge for card acceptance or automatic conversion. A payment that appears straightforward can include two separate markups: the DCC provider’s margin and any commission from the merchant.
Representative provider behaviour and the transparency spectrum
Providers fall along a transparency spectrum. On one end are cards and accounts that advertise use of the mid-market rate and itemised, small fees. On the other end are traditional bank cards that embed a 1–3% FX fee or apply a flat ATM fee per withdrawal. Wise (formerly TransferWise) advertises the principle plainly: “No hidden fees & no subscriptions, no monthly costs. See the fee upfront and only pay for what you use.” That approach reduces surprises because the consumer sees the conversion price before acceptance. (Wise)
The fintechs’ policy differences matter on a trip. A multi-currency travel card that allows holding and spending in local currency will avoid an on-the-spot conversion, but limits on free ATM withdrawals and weekend exchange rules can reintroduce costs. Public comparisons and buying guides aimed at travelers list strong candidates for the best Europe travel card 2025 and the top travel cards Europe, but the correct choice depends on the traveller’s pattern of cash use, card acceptance needs, and tolerance for small recurring fees. (Post Office) (MoneySavingExpert.com)
Common traps and the arithmetic of hidden fees
A simple example clarifies the mechanism. A €100 restaurant bill converted by a DCC service at a 5% markup becomes €100 × (1 + 0.05) in effective cost. If the cardholder’s bank uses a near-mid-market rate and charges no extra fee, the same bill will be cheaper after the network conversion. The markup can exceed 10% in exceptional cases, according to regulatory reviews cited by consumer organisations. “The consumer is always paying more just to see the price in their own currency,” observers have noted. (Bankrate)
Weekend and after-hours markups are another arithmetic surprise. If a provider applies a 1% weekend surcharge on currency exchanges, a sequence of small purchases can accumulate an excess cost equal to an extra visit’s worth of spending. ATM flat fees produce a stepped loss: a €3 access charge makes small withdrawals disproportionately costly, which is why many guides recommend larger, less frequent withdrawals where safe and practical. Practical comparisons in travel money card reviews calculate a per-transaction effective cost by summing exchange margins, withdrawal fees, and any monthly account charges to give a single, comparable figure for travel budgets.
Practical safeguards a traveller can apply
- Always choose the local currency when prompted. Merchants and ATMs will often present two options. Accepting the local currency lets the card network perform the conversion, making it possible to compare with the issuer’s published terms. Visa’s consumer guidance is explicit on this point. (Visa)
- Check explicit provider policy on weekend or out-of-hours markups before travel. If the cardholder expects to convert in small increments, plan exchanges on market hours where possible. Providers publish these rules in their fee documents and FAQs. (Revolut) (Wise)
- Use a dedicated multi-currency travel card if the itinerary uses several currencies. Prepaid travel card Europe products that allow preloading of euros, pounds, and other currencies let the traveller lock a rate ahead of time and avoid per-transaction DCC. A multi-currency travel card reduces small conversion events that a merchant might exploit.
- Minimise ATM friction. Fewer, larger withdrawals limit the impact of per-withdrawal access fees. Where ATM networks charge high access fees, consider a card that refunds ATM charges or one that offers a higher free withdrawal threshold.
- Keep a small cash reserve in the local currency for markets and small vendors. This avoids both small-value ATM withdrawals and merchant DCC prompts.
How comparison guides treat the subject
Consumer and industry comparison services score cards across multiple vectors: FX margin, ATM fee limits, monthly or inactivity charges, purchase protections, and acceptance footprint. A travel card comparison Europe that focuses only on headline advertising (zero foreign transaction fee) can miss weekend or withdrawal limits. A thorough review will list effective cost per €100 of spending and per €100 withdrawn in cash. Publicly available guides aimed at European travellers run tests and publish tables that present those effective costs for side-by-side reading. (Post Office) (MoneySavingExpert.com)
Short checklist for a purchase decision
- Confirm whether the card uses the interbank or mid-market rate for conversions and whether a sliding markup is applied at weekends. (Revolut) (Wise)
- Verify the free ATM withdrawal limit, the charge above that limit, and whether ATM operators can add DCC prompts. (Revolut)
- Read recent travel money card reviews and travel card offers Europe to identify practical usage reports from travellers with similar behaviour. (Post Office) (MoneySavingExpert.com)
- Consider whether a prepaid travel card Europe or a multi-currency travel card fits the trip: holding currency ahead of time is preferable for multi-country itineraries. (Wise)
What the data says about consumer impact
Large datasets and regulatory reviews show a non-trivial aggregate impact. Consumer groups and financial journalists have documented systematic markups by DCC providers, and public estimates place the annual cost to certain national consumer bases in the hundreds of millions of pounds. Educated selection of cards and disciplined payment choices materially reduce those losses. The evidence supports a practical rule: the marginal effort to reject DCC and verify the conversion before confirming a payment almost always pays for itself on a short trip.
Where to look for up-to-date guidance
Searches for “best travel cards for EU”, “top travel cards Europe”, and “fee-free travel card Europe” return regularly updated lists from consumer sites and issuer pages. Comparisons that aggregate transaction-level effective costs are most useful when comparing travel card comparison Europe resources and travel money card reviews. Public issuer fee pages remain the authoritative source for precise terms and for questions about weekend markups and ATM thresholds. (Post Office) (Revolut) (Wise)
Final Considerations
The decision to use a specific card while travelling in Europe should rest on a cost calculation that includes conversion behaviour, withdrawal frequency, and the trip’s currency mix. Avoid automatic currency conversion on terminals and at ATMs. Verify whether the chosen product is presented among the best Europe travel card 2025 lists and consult travel card comparison Europe tools that state effective per-transaction costs. For travellers who prefer predictable costs, a prepaid multi-currency travel card or a transparent fintech product that advertises mid-market rates can reduce surprises. For others, a fee-free travel card Europe from a well-documented provider may be preferable, provided the traveller understands limits and edge cases. Careful pre-trip preparation makes a noticeable difference in the travel budget and eliminates many small, repeated losses that add up over a trip.