Pay in CAD or local currency abroad?

Local currency. The Government of Canada's travel site says to choose the currency of the country you're in, because converting to Canadian dollars at the till or ATM comes with high conversion rates and fees.

You tap your card at a restaurant in Lisbon, and the machine asks: pay in euros, or in Canadian dollars? Canadian dollars can feel safer, because you see the number you know. But it usually costs more.

What is dynamic currency conversion?

This is called dynamic currency conversion. The shop, or the ATM, offers to convert the amount into Canadian dollars for you, at a rate it sets.

The Government of Canada's travel site is direct about it. It says to always choose to be charged in the currency of the country you're in, because you'll pay high conversion rates and transaction fees if the conversion is done into Canadian dollars.

What do you press at the machine?

• At a card machine: choose the local currency (euros, pesos, US dollars and so on).
• At an ATM: if the screen offers to convert the withdrawal into Canadian dollars, decline it.
• If a server or cashier asks: say "local currency, please".

Your own card issuer still converts the amount to Canadian dollars on your statement. That conversion has its own charge, which is in your card agreement. See what your card charges for foreign purchases.

Why doesn't a refund match what you paid?

If you return something bought abroad, the refund on your statement may not match what you paid. The Financial Consumer Agency of Canada explains that the exchange rate changes from day to day, so the refund can be for a different amount.