Best Currency to Use in Dubai (USD vs AED vs INR, Cash/Card)

I once went to Dubai with a friend; she carried an INR-based travel card, and I had some leftover USD from my previous US trip. Neither of us had an AED, and it was honestly embarrassing when small local stores didn’t accept our money. We just stood there, broke in Dubai!

The best currency to use in Dubai is the United Arab Emirates Dirham (AED). Because it’s the official currency, AED is accepted everywhere, from malls and restaurants to local markets and street vendors. You can carry it as cash or, better yet, load it on a forex card for convenience & safety.

Now I get it, not everyone shops at local markets. Most of you head straight to malls, where INR travel cards and even USD bills are often accepted. So you might be wondering why not just stick to those. Well, besides limited acceptance, there are several other drawbacks to relying on them. Curious? Let’s talk about it!

Comparing Currency Options for Dubai: USD vs INR vs AED

1st Scenario: Carrying US Dollars to Dubai

You can use US dollars in Dubai, but relying solely on them for all expenses is not a good idea. While many stores, hotels, and malls accept USD, smaller stores and local vendors prefer the official currency and might refuse USD payments.

Even merchants that do accept USD decide their own exchange rates, which are surely less favorable than the market rates. You’re basically paying a premium for no good reason.

You’ll also get your change back in AED, but it’s usually given at the same bad rate the shop chose. So, you end up losing money not just when you pay, but also when you get your change.

If you use a USD-based forex card in Dubai, you’ll likely pay up to a 3% cross-currency fee unless your card specifically offers a zero cross-currency fee benefit.

2nd Scenario: Carrying Indian Rupees to Dubai

You generally cannot use your Indian Rupees (INR) directly to pay for things in Dubai. Shops, restaurants, and attractions will not accept INR as physical cash. You will need to exchange your INR for AED.

It’s better to exchange your INR before you travel rather than at the airport or local exchange centers in Dubai, where rates tend to be less favorable.

Airport exchange counters usually charge 10-15% higher rates, and local exchange centers in Dubai, especially in tourist areas, also charge very high rates.

This is because they know travelers have limited options and are willing to pay more for convenience. Plus, their operating costs are higher, so they add a bigger margin to make more profit.

Also, it’s best to exchange your AED before you travel, not just because you get better rates in India, but also so you arrive with some cash ready for immediate needs like a taxi or a drink.

Now you might be thinking, why not just take an INR-based credit/debit card to Dubai and use it at least where card payments are accepted? The thing is, these cards come with a 3% foreign transaction fee.

On top of that, some merchants may offer a Dynamic Currency Conversion (DCC) option, which lets you pay in INR instead of AED, but this comes with markups of 1-2% to a very high 12%.

So, while INR payments are accepted in a few places in Dubai (only via card, though, and not cash), you end up paying a lot of extra charges just for convenience and to skip the currency exchange process.

3rd Scenario: Carrying UAE Dirham to Dubai

Carrying UAE Dirham (AED) to Dubai is the smartest choice. Since it’s the official currency, you can use it everywhere without any hassle. Whether you pay in cash or load it on a forex card, you avoid extra fees and get the lowest exchange rates.

Now, while AED cash is super convenient & accepted everywhere, it comes with risks. It can be easily lost or stolen, and unlike digital payments, it leaves no transaction record, making dispute resolution difficult.

So, it’s smarter to carry around 10-20% AED in cash for immediate needs and keep the remaining 80-90% safely loaded on a forex card. This way, you get convenience and security together.

At BookMyForex, we offer AED in both currency notes and forex cards at the lowest guaranteed rates. If you find a better rate elsewhere, we’ll give you 2x cashback!

You can place your order online anytime via our app or website and get it delivered the same day.