Many Danes go on vacation every year. As payment terminals become more and more widespread, more people are using their Visa / Dankort to process the payments. In many places, you can see the price in US Dollars when you pay. Why not say yes to that?
It is more clear when the amount is shown in the US Dollar. In addition, it is not necessary to have a currency converter when paying the bill. The reality is that it is far more expensive to pay in US Dollars than the local currency. Read on and understand why.
Payment with Danish currency abroad
On one of the Danes’ favorite holiday destinations, Spain, it is very common to receive the offer of payment in US dollars. However, please note that payment in Danish currency is not at the official rate. There are several different explanations for why the price is higher.
Instead, it is at a rate that can be agreed upon between the owner of the payment terminal and the local bank. As long as the course does not exceed international rules, it is not prohibited to do so.
It is not only the foreign bank that makes money that you pay in US dollars. Nets in Denmark also charges a fee when the currency conversion is done in the foreign ATM or payment terminal. It helps raise the price for you.
How much will it cost you?
You can expect the amount to be about 3% more expensive when you get converted right away on holiday. If you eat dinner for 500 USD at a restaurant, it will end up costing you 515 USD. Below you can see a calculation we have made.
Our calculation uses a family of four, which is 14 days in Malaga. We have assumed that the family has a budget for pocket money of USD 12,000. Below you can see how the amount works out.
USD 360 does not appear like a lot of money if they spend USD 12,000. From a larger perspective, it can quickly become a lot of money. If you go on holiday annually and consistently pay in US Dollars, it will quickly run out.
You need to be aware of more than the exchange rate when using your card abroad. When using your card in foreign ATMs, you must pay a fee to the bank. It varies from bank to bank, but typically you have to pay $ 30 in cash withdrawal fee.
You should also be aware that you can raise a maximum of 2000 USD a day in foreign machines. Furthermore, there is a consumption limit of USD 20,000 per month on Visa / Dankort when you are abroad. It applies wherever in the world you use the card.
What is the cheapest holiday?
The cheapest for you will be sole to use your credit card on holiday. For all payments, make sure you pay in the local currency and not get the amount shown in the US Dollar. However, it is not all places that you can only use your debit card.
If you need to spend cash on a vacation, it is best to withdraw the money from a local ATM. This may seem contradictory, as it is associated with 30 USD in fees. But you can get a better rate when you raise the currency of the country’s own vending machines.
Many people exchange money at the airport before leaving on vacation. If you want the local currency before you arrive at your destination, you should exchange the money at the airport from which you are flying. If you switch to the local airport, you will typically get a worse rate.
Amount limit abroad
There are a number of other things to keep in mind when using your card abroad. You can raise a maximum of 2000 USD a day. Therefore, if you plan to pay for a hotel stay in the local currency, calculate how much money you can withdraw daily.
It is important to keep in mind if you are planning to pay large sums in cash. For example, if you were thinking of paying for your hotel or similar with cash. Also, keep in mind that you can spend a maximum of $ 20,000 on your card abroad.
When you are abroad, you can spend a maximum of USD 20,000 on your Visa / Dankort monthly. If you are traveling for a long time, you should include in the calculations how much money you will need. For example, if you pay expensive hotel stays or airline tickets with the card.
Using the card when traveling
If you have the opportunity, you should bring an extra credit card on holiday. In case you lose one card, you will have one in reserve. If you lose your card, it can cause unnecessary hassle on your holiday. Therefore, two payment cards can help you increase your security.
When spending money overseas, you should also make sure you keep the receipts on all the transactions you make. If you suspect that too much money has been deducted from your card, you will be able to go back in your receipts and see if things match.
You should always know where your debit card is when you are abroad. If you lose your card, contact Nets in Denmark as soon as possible. Calling Denmark can be expensive if you are traveling. However, the alternative can quickly become far worse.
It can easily become inconceivable to find financing when you go on vacation. With our guide, we hope you have learned how to make the most of your money on the holidays.