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ATM/Credit Card Usage In Ireland - Lessons Learned

ATM/Credit Card Usage In Ireland - Lessons Learned

Old Jun 24th, 2004, 04:57 PM
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ATM/Credit Card Usage In Ireland - Lessons Learned

I just received my M/C statement from my May trip to Ireland. As Gomer Pile would say, "Surprise, surprise, surprise." Here's a brief synopsis:

a. 22 May - Arrived Shannon and used my ATM card. Got my bank statement and did the math. I got a 1.21 exchange rate (Dollars for Euros).

b. 23 May - M/C statement showed cost for rental car and showed the conversion rate. I got l.20 exchange rate.

c. 23 May - M/C Purchases at Ballybunion - no exchange rate shown - Credit card charge was $124.98.

d. 24 May - M/C Purchases in Dingle at Kerry Woollen Mills - no exchange rate shown - Credit card charge was $154.91.

e. 24 May - M/C Purchases in Dingle at Dingle Woolen Co. Statement showed charge for purchases and conversion rate. I got 1.20 exchange rate.

f. 24 May - Used my ATM card in Dingle. Did the math from bank statement, and I got a 1.21 exchange rate.

And I could go on and on, but here's what I found out after I reviewed all my receipts and bank statements:

a. Everytime I used my ATM card I got a great exchange rate for getting cash, about 1% above the market exchange rate.

b. Everytime I used my M/C, I got varying exchange rates -- Here's why.

When I looked at my receipts, and the merchants charged me in Euros, I got a great exchange rate.

When I looked at my receipts, and saw that the merchant did the exchange rate conversion for me thru their credit card machines, I got screwed. They did the exchange rate for me and charged my credit card in $$$ which added somewhere between 2-3% to my purchases.

I should have known something was funny when at Ballybunion I made purchases in the amount of 100 Euros and gave the merchant my M/C. When I looked at and signed the receipt, it showed a conversion rate in dollars of $1.249762. I kinda of chuckled and thought in my mind that I would be getting the normal bank rate which at the time was about 1.20 to 1.2l. To my surprise, evidently, the merchant did the exchange rate in their credit card machine for me to their favor. Instead of the purchases costing me $120 and change if I were charged in Euros, it ended up costing me $124.98.

Several merchants, not all, did the same conversion and charged me in $$$ and not Euros. I got screwed. It was about 50/50. My problem is, at the time I didn't know the difference.

When the merchants charged me in Euros -- I got a fair rate.

Lesson Learned -- Make sure, especially in tourist areas, that your credit card is charged in Euros, not $$$. Once they find out you're an American, they'll charge you in $$$, and it will cost you more. Make sure all your purchases are charged in Euros, not $$$. Insist on this!!!!!

I only hope someone will read this long message and learn from it.
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Old Jun 24th, 2004, 06:05 PM
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Thanks for the "tip". As far as VISA goes they said they'd charge the bank exchange rate but I guess we tourists should definitely specify to be charged in Euros.
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Old Jun 24th, 2004, 06:22 PM
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I think some others have reported on here about this thing of foreign merchants charging cards in USD, which I was sort of surprised they could even do since they are in a foreign country. But I guess MC somehow allows it. I think it has always been in Ireland, however, I guess they all get together and tell each other.

Actually, you don't say what company your MC is, but that exchange rate you quote isn't really that unusual for a credit card and isn't that bad a deal. YOu won't get the bank rate on a credit card ever. There have been thousands of posts on here about that, probably. You will always pay at least one percent more. Many credit cards will charge up to three percent total, so that difference of three cents you cite is (1.21 to 1.24) only a total difference of 2.5 percent. That really isn't bad at all.

Also, the date of transaction is not necessarily the same date as the conversion is made on credit card bills, so you probably couldn't figure out the exact rate unless the rate was listed on the bill or the exchange rate didn't vary at all for several weeks. I know I called to inquire about the rate on one of my MC purchases, and it was actually converted about 7-10 days after the purchase by the bank system.
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Old Jun 24th, 2004, 06:46 PM
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Christina, my credit card company told me that M/C charges a 1% fee on all transactions. Based upon what I got charged, it was pretty much in line with the bank rate, with the exceptions of the places that did the conversion for me.

My purchase at Ballybunion of 100 Euro cost me an additional $5. I don't call that chicken feed. It was a bit more than than 2.5%

My credit card company gives me the date of transaction and date it posts. They were both the same for all my transactions. The rates averaged between l.20 to 1.22 over the 10 day period, in line with the fluctuation of the $$$.

Bottom line, don't let the merchant do the conversion rate into $$$ for you. It will cost you, whether it be 2,3,4, or 5%
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Old Jun 24th, 2004, 09:47 PM
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There have been other postings involving variation of this "I will do you a favor by charging you in US dollars" trick.
It is a matter of always asking yourself whether the amount charged is correct no matter what currency they choose. While the odd is usually against you when the merchant offers (forces) you this "option", there was a posting earlier this year saying that the there was a merchant who actually charged in us dollars without markups.
If you don't know up to the minutes conversion rate, it is best to refuse such offer. I was offered this option for a rental car payment. I told them to go fly a kite.
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Old Jun 24th, 2004, 11:23 PM
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"Instead of the purchases costing me $120 and change if I were charged in Euros, it ended up costing me $124.98".........

So - it cost you an extra $4.98? Is it just me or did you just waste an remarkable amount of time in going through bank and credit card statements to discover that you lost about the equivalent of a pint of Guinness? Surely you have better things to do with your time?
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Old Jun 25th, 2004, 12:04 AM
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Exchange services are businesses. Consider the effort required to post and convert charges and then try to price them. Until we have a 'universal currency' these pricing complaints will continue. Shortly there will be a Europe wide currency...Tip - avoid minimal withdrawals!
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Old Jun 25th, 2004, 01:56 AM
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I had what you describe happen to me once: at the Temple Gate Hotel, Ennis, County Clare. I thought the rate they charged me (in U.S. dollars vs. Irish Punths, at the time) was too high. I asked John Madden (the owner) about it: he said they did that as a convenience to the customer. Actually, it is a convenience and money-maker for him. Most U.S. Bank-issued Credit Cards charge a 'foreign currency transaction fee' for purchases in other than U.S. Dollars. That fee can go as high as 4.5%. The Irish merchant won't call it that but effectively he is pocketing an amount about equal to that foreign currency transaction fee when he charges your purchase in U.S. dollars. You're going to get charged one way or another as long as you use your U.S. Bank-issued Credit Card.

See if you can get to someone in your Credit Card Bank and ask about Foreign Currency Transaction Fees. It will be difficult because most Bank employees don't know anything about them. I found that my Bank One Visa charges the max but my Sears MasterCard charges 1.5%.

My solution: There are no Transaction fees on my Credit Union Check Card, so since that unfortunate experience I hit the ATM's and pay cash for everything.
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Old Jun 25th, 2004, 03:24 AM
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Bud is right. Always specify that you want the charge to be made in Euros. If the merchant tells you that can't be done for some reason (computer issue, your 'American' credit card, etc.), take your business elsewhere. It CAN be done...and usually without any difficulty at all.
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Old Jun 25th, 2004, 03:53 AM
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Plates, yes, I believe it is just you.

How many Guinnesses does it take before one says "Ouch"? That was just one transaction out of many that I got screwed on, and it only took about 5 minutes of my time to realize it.

Taking that one transaction for 100 Euros, why should the price charged by the merchant for using cash be $120, and the price for using my credit card be $125?? That's essentially what happened.

Besides, it's the principle of the matter. Since my M/C only charges 1% for the conversion, the merchant charges me 4.5% for the conversion which is probably the recoop of the fees he is charged by M/C because I used my M/C.

Most B&B's I stayed took M/C or Visa but preferred cash so they wouldn't have to pay the credit card company for the use of that card.

Another thing that iritated me was that the merchants did the $$$ transaction charge without even asking.

P.S. My Guinnesses only cost me $4.00.


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Old Jun 25th, 2004, 06:56 AM
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As I remember, Blarney Woolen Mills "insists" (when you use a credit card) that the conversion be made to dollars and that they refund your VAT onsite. The whole expense was something like 8-9%. I don't know if it was the person behind the register or the company policy. When I heard her say that to the customer in front of me, I went outside to the ATM and got what I needed. Granted, you pay a percentage to the VAT back company that processes the request. They, at least, make that clear when you do that.

I'm not sure I would call checking one's credit card statement for errors a "waste of time", especially after an international trip. Strange charges can appear, especially from rental car companies. I caught an instance where the company did not refund my damage deposit. How many Guinness can I buy with 500 Euros?

Sure it just seems like a little money here and a little there. But I'd be happy to take the 5 Euro off someones hands if it's not worth the trouble to save it. I could use another Guinness.

Bill
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Old Jun 25th, 2004, 10:36 AM
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Surprise! I just received in today's mail a notification that my Sears M/C was being taken over by CityBank. And in all that stuff we never read (terms and conditions) they state that their Foreign Currency Transaction fee will increase by a total of 3% on July 3. That will bring them up to the max (4.5%)!

So, I'll have to back off what I said in my earlier post: If you charge your purchases in Ireland to your Sears MasterCard you may get an unwelcome surprise.

I am considering whether to cancel that MasterCard account by the date they indicate.
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Old Jun 25th, 2004, 11:22 AM
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Budman said,"Most B&B's I stayed took M/C or Visa but preferred cash so they wouldn't have to pay the credit card company for the use of that card."
In my opinion,the more likely reason was to hide the transaction from the tax authorties.
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Old Jun 25th, 2004, 01:05 PM
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I have commented before about being charged in the card's billing currency (US$, Pound sterling etc) when using a non-Irish credit card in Ireland. When I paid my deposit by Visa c.c. for a cottage rental last December, my transaction was made out in sterling at a rate disadvantageous to me by 4.5%. When it came to pay the balance this month, I sent an e-mail to the agents specifically asking them to put it through in euro. It was indeed done in euro and my credit card company converted it into sterling at a rate no more than 0.5% worse than the closing interbank rate on the day it went through (the following day).
The moral is: you can insist that the transaction goes through in the local currency - I believe it is a condition imposed by Visa and Mastercard International. It's nonesense to claim it can't be done - they are breaking the merchant's conditions by not offering you a choice. Look at the slip presented to you for signature: it should say somewhere that you were given a choice of currencies. If you were not offered that choice, refuse to sign it and ask them to resubmit it in local currency. If they refuse it, tell them you'll ask for a chargeback through your card issuer as an unauthorised transaction.
BTW, this conversion at the point of sale is called 'dynamic currency conversion' (DCC) and is being increasingly used by merchants to increase their revenue by sharing the commission on currency conversion with their card handlers. The loser is you the customer ('we are doing this as a service to you' is just a PR spin) and your card issuer who can't charge you extra for currency conversion, though few of us would shed tears for them.
So remember: In Ireland (also sometimes in UK and a few other countries), when you hand your card over, say very clearly 'I want to be charged in euro' (or whatever is the local currency) BEFORE they swipe it on their machine.
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Old Jun 26th, 2004, 09:20 AM
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We were concerned about this as well on our recent trip to Ireland. However, after carefully reviewing my credit card statement and looking at the interbank rates for the days we were in Ireland, I can honestly say that in our case there was no noticeable difference between the currency exchange rate/fee charged by my issuing bank and for those transactions processed thru an alternate means using dynamic currency conversion. In other words, we didn't pay any more for those transactions charged in US dollars than we would have if the transactions were charged in Euros.

As others have noted, VISA & Mastercard automatically add 1% to the going exchange rate (usually the interbank rate). There is no way around this that I am aware of as every VISA and Mastercard applies the fee. Your individual card issuer (FirstUSA in my case) may then add an extra currency exchange fee on top of the VISA/Mastercard fee. This fee varies from 0% for some card issuers to 3% or more for others. Our FirstUSA card adds 2% which is typical of many cards. Note that the fee structure on most all cards is not additive, but multiplicative. In other words, if the going interbank exchange rate for Euros to USD is 1.20, then a Euro 100 purchase would actually cost $123.62 (Euro 100 x 1.20 x 1.01 x 1.02), not $123.00 (Euro 100 x (1.20 + .03)). In addition, exchange rates are constantly changing so back-to-back transactions may be charged at slightly different rates. www.oanda.com can provide historical interbank conversion rates.

Dynamic Currency Conversion (DCC) basically changes the processor of the transaction from your card issuer & VISA/Mastercard to a private, third party firm with whom the retailer has an agreement. The exchange rate offered by the third party is frequently very close or identical to the rate you would see from a VISA/Mastercard with a 2% fee, like my FirstUSA card. Of course, some processors may charge more. The third party shares part of the exchange fee, typically 1/2%, with the retailer. We had 12-15 transactions conducted in U.S. dollars thru DCC and none seem to have been charged at more than the Interbank + 3% rate I would have expected from VISA and my card issuer. Curiously enough, NONE of those retailers ever asked what currency I wanted the transaction completed in which is illegal.

I agree with the recommendation to get the charge in Euros if you have any doubts and notify the merchant before handing your card over. But if you already know that your credit card adds 3% to the Interbank rate, then it probably doesn't matter which currency the transaction is processed in. If you know your card adds less than 3%, then you are likely losing out if the transaction is processed in US dollars.
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Old Jun 27th, 2004, 08:12 AM
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Interesting topic and replies. Thanks for the info.
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Old Jun 27th, 2004, 09:17 AM
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I was shopping in Harrods last year and when I went to pay with a credit card I was asked if I wanted to have it "charged in dollars." I laughed as I handed over my UK issued mastercard and said "I live here."
It pays to watch for this "scam" as it will probably become the norm.
As for "wasting time" by checking over credit card statements- it's probably one of the best uses of time to make sure you're not being over charged, double charged or mis-charged!
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Old May 19th, 2005, 11:34 PM
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ttt- for ediemay
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Old May 20th, 2005, 01:04 PM
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Yes, but bear in mind that the 'NEW' fee rules call for transaction fees on ALL foreign transactions, regardless of currency paid, so DCC will cause DOUBLE CHARGES.
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Old Sep 13th, 2005, 07:43 PM
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ttt for a poster looking for this post.
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