Uber to charge on overseas rides if you pay using your home currency – here's what you need to know

From Thursday 27 February, Uber will automatically set British pounds as your 'preferred currency' for payments when you take a trip in Canada, the US or any country using the euro. Rides in other countries aren't affected at this stage.

This means instead of being charged in the local currency (dollars or euros, for now), you'll be charged for each ride in pounds sterling.

Uber wouldn't tell us what exchange rate it'll use when you pay in your home currency abroad. Its terms only state: "The exchange rate applied to your total amount is based on rates provided by our financial partner. The exchange rate will be displayed in the payment breakdown provided to you prior to booking and purchasing your trip." But we do know that it'll add a 1.5% conversion fee on top.

Why the currency you pay with (and how you do it) matters

An exchange rate tells you how much of one currency you can buy with another, for example, how many US dollars you can buy in British pounds. If you choose to pay in your home currency, the retailer – in this case, Uber – will set the exchange rate. Pay in the local currency and the rate will be decided by your debit or credit card provider.

Most credit and debit cards let you spend abroad, but will charge you for the privilege. Although your card provider gets near-perfect rates, it usually adds a foreign transaction fee of about 3%. On top of this, some debit cards charge a flat fee each and every time you spend overseas, regardless of the amount.

As a rule of thumb, top overseas cards won't charge you, so you get near-perfect exchange rates and avoid additional fees. Of course, if you're using a credit card, ALWAYS pay it off IN FULL every month.

Our current top pick is Chase – the debit card gives you the near-perfect Mastercard exchange rate when you spend and doesn't charge fees for spending or cash withdrawals overseas. It also gives an ongoing 1% cashback on most purchases – up to £15 a month – meaning you get a little back on your holiday spending.

For full info and more options, see our Top travel cards guide.

How to switch to the local currency for Uber rides

If you do want to pay in the local currency when you take rides abroad, you can do this by changing your settings on the Uber app. By doing this and paying with a top travel card, you can make sure that you're getting a near-perfect exchange rate and avoid paying extra fees.

To do this, look out for an email about "Preferred Currency Preferences". This should have a button labelled "See Currency Preferences", which will take you directly to the Uber app. You can then select "No preferred currency", as shown in the screenshot below.

You should also be able to change this setting directly in the Uber app, by going to the Wallet section and scrolling down to 'Preferred currency'. However, you may not see this option yet as it's still being rolled out – so if you're travelling on or after Thursday 27 February, remember to triple check the preferred currency setting in your Wallet before you order a ride.

For more ways to save when travelling abroad, see our 60+ overseas travel tips.