Uber might be more convenient, but this little-known setting may also make your overseas holiday more expensive.

Travelling in a foreign city on public transport has always been a fraught experience, albeit character-building, too. Smartphones and travel apps entered the travel landscape and undoubtedly made it simpler. But then came Uber.

The multinational transportation company removed the need to figure out a foreign public transport system altogether. Promising comfort, safety and ease, it has quickly become one of the best phone hacks for overseas trips. It’s a given that travelling around in an Uber will be more expensive than taking a bus or a train, but a new in-app setting could be adding unnecessary fees to your international rides – and you probably don’t even know it. Here’s everything you need to know about Preferred Currency Pricing.

What is it and how does it work?

Preferred Currency Pricing is a new Uber feature that allows guests to choose what currency they pay in when using the app overseas. Having your home country’s currency as the preferred one means your fare for the ride reflects the local dollar. Sounds good, right?

Yes, this can be beneficial for some travellers. By opting in, you can easily keep track of your overseas expenditure as the price you see is the one you’re most familiar with. It also means you can avoid potential foreign transaction fees from your bank at home.

But like most things in life, Preferred Currency Pricing also has a downside. When turned on, guests automatically incur an in-app conversion fee of 1.5 per cent every time they book a ride with Uber. It is enabled by default in the app’s settings and must be switched off manually, so you may not even realise you’re overpaying until it’s too late.

In fact, depending on which country you’re in and how the dollar at home compares, it could cost you even more to convert than to pay in the local currency directly. This includes cancellation fees, clearing of arrears and changing of destinations.

How can I avoid the Preferred Currency Pricing fee?

In a world where overseas travel is booming, free currency conversion for international trips is extremely common. But with Preferred Currency Pricing enabled, Uber will still charge you a 1.5 per cent fixed fee for conversion, even if your bank doesn’t. So, how do you avoid it?

Those travelling overseas can easily turn the feature off manually in the app’s settings. Under the ‘Account’ section, you’ll find a subheading titled ‘Wallet’. Scroll down until you see ‘Preferred Currency’, then click in and select ‘No preferred currency’. It’s that simple!

It’s always important to check with your bank before you leave and ask about international surcharges as well. Some banks may still charge for foreign transactions, which is separate from Uber’s 1.5 per cent fixed fee. Do the math and figure out what makes the most sense for you.