Dynamic Conversion charges
 

I just received a notice at the bottom of my monthly credit union statement that Visa will add a 0.80% International Service Charge for international single currency transactions processed in U.S. dollars. I called to ask if this would be added to the current 1% charge. It turns out that it is a charge that Visa is adding to DCC whatever rate the merchant is charging and your own bank might be charging for a transaction outside the U.S.

A one-two punch. DCC...bad.

Thanks for the heads up, M

I'm usually not a "good ol' days" type of person, simply because for everything that was good about the old days, there's usually 30 things better about now. Plus, why look back?

HOWEVER, I think the DCC gets under my collar so much because it ruined a perfectly good thing before it was invented. Technology had made everything so easy. Need cash abroad? ATM. Everything else? Just charge to the credit card for a very good rate of exchange. No issues, no anger.

Then came the DCC. Now, to avoid getting into an argument with waiters, desk managers, and so on and thereby just ruining the ambience of the meal, the stay and so on, we just fork over cash. I just wish I had never known how easy it all once was!!!!

Correction: "...there ARE usually 30..." I blame the DCC for poor sentence construction, too.

How prevalent is DCC in Europe? Are certain countries worst offenders?

I've only encountered it in Kenya and China so far.

This fee will be unavoidable if using credit cards in foreign countries where USD is the official currency.

I've seen reports here on Ireland.

In my experience, car rental agencies apply DCC in Portugal and Scotland when assessing local fees and repair bills, the latter fully reimbursed by Visa eventually. Some stores in Scotland have offered DCC as a convenience.

Thanks, Michel.

I should add that in the 2 countries where I've encountered it, it wasn't that prevalent, only at the Nairobi Hilton and Marriott family hotels in Shanghai.

Thanks, Michael.

The DCC has made inroads into Spain, El Cortes Ingles for one.

Does this mean that my credit card was charged in dollars in a foreign country (where USD are not official currency) that I have been a victim of DCC?

Sorry to be behind the times about this!!

ekscrunchy,

yes, and you can check how much you were charged more than the day's rate by going to http://www.xe.com/ccc/

Yup,

You see they are doing you a favor, by not charging you in some foreign currency, but rather in your own. So you can see the price and not have to do all that math. Of course, there will be a small fee to convert into your own currency from their's...but hey, the convenience of knowing exactly what you paid.

Thanks, I'll do the math in my head.

Foreign country, foreign currency, no switcheroos.

Somewhat similarly, I've seen a few threads here where someone renting an appartment in Europe say something like..."they're great and you can pay in US$".

When I hear that I go "hmmm". First thing I'd do would be to compare the euro rate to the US$ rate on their website. If they are an American company, accepting payment before you go, probably OK.

Sorry..maybe I should have added that they did not convert local currency on the bill..they just charged me in dollars.

All prices at this particular hotel were in dollars, for everything from rooms to food..when booking, prices on their website were in dollars.

Interesting. I'm from Canada, would they charge me in US$. Might be that they want US$. Might I assume this is not in Western Europe? If I walked in off the street and said I need a room, I assume they would bill me in their local currency?

I just checked my bill and the VISA statement. Statement matched the hotel's charge to the penny. (I was nervous there for awhile!) But correct, in Laos, not Europe.

Interesting..if I had walked in off the street, who knows. But in this case would not have mattered much pricewise, or so it appears to me.

ekscrunchy,
In your case, I wouldn't say that it's DCC.

Michel,
In the Seychelles, I paid my hotel bill in EUR which is the currency they charge everyone (I'm from the US). All prices were listed in EUR and they didn't accept Seychelles rupees.

In Kenya, I have to pay for park fees in USD. It's a requirement for non-residents regardless of where you're from, so Canadians would also pay in USD.

Very often (though not always) - flats and apartments that accept US$ are US-based owners/agencies.

There are a couple of agencies w/ apartments in Paris and/or London that are US-based and LOTS of individual owners of European vacation rentals are Americans.

So those would not be DCC - just simple $ transactions.

PS - Just to clarify, the Nairobi Hilton incident I mentioned earlier was definitely an example of DCC. Everything at the hotel was priced in KES, they gave me a folio in KES on checkout but then presented a charge slip to sign in USD. On subsequent trips, I just paid in KES cash.

Thank you for clarifying this..

Just responding to Patty's enquiry about where one finds the DCC:

We found it to be ubiquitous in Ireland by the time of our 2005 (I think that was the year) trip. By the fifth day of a 15-day trip, we just stopped paying with credit cards because of the detailed argument one would have to present to a usually innocent waitress or deck manager. Given that some small towns in Ireland do not have ATMs, it became important to do major cash withdrawals with two ATM cards whenever we could.

We also found it in Italy 2006 at a few places in the coastal Tuscany region. Someone also told us the Del Senato in Rome had been using DCC, but they did not do so on our bill.

The standard response when one questions this is, "It's just a convenience, sir. We're going out of our way to charge you in YOUR currency." So the client has to look like the bad guy if he complains.

Thanks everybody for letting me know where in Europe you've experienced DCC. I've also resorted to just paying in cash as it gets tiresome to argue.

There was never an argument on my part...

When, in either Ireland or Scotland, they tried to pull this scam on me it was simply, "I did not request you convert the currency. Please don't waste time with the lies managements teaches you to tell customers about this garbage. Either void the transaction or bring the manager over." It was done calmlhy and of course several times elicited the response, but we're doing this as a service to you....my response, smiling, bring the manager over and invariably, the manager knew exactly what had to be done.....

But to pay cash on a trip because of this garbage, never in a million years.

I've also experienced DCC in a Zurich souvenir shop. They were being so "kind" as to charge me in US Dollars, but the rate really sucked since I had checked the rates that AM before leaving the hotel. They charged me almost US$23 for a CHF 19 item. Had the direct daily exchange rate been used, I should have only been charged a little less than $19, and if you tack on the 1% my credit card charges, then I would have only had to pay about US$20.

I had them reverse the charges, and I paid in cash. I don't need them to do me that favor.

I remember last year, I was given the choice of either taking the DCC or rejecting it in Europe. What happened to that choice? Are the newer machines no longer allowing choice?

mcnyc..

Let's make it very clear...the merchant's agreement for visa/mc specifically says that while a merchant can pull this dcc scam, it can only be done with the consent of the customers..

The terminals all ask the cashier before completing the transaction whether the customers wishes to be scamm..oops pay in his or her local currency (BTW just to make it clear to an earlier poster, it is not limited to USD...it's done in CAD, AUD, GBP, JPY); some merchants in the USA are being solicited by a card payment processor to begin doing it to folks from euroland as well as Brits..it is a cancer metastasizing through the tourist world...

Cashiers are taught to lie to customers...among the lies that are thrown out are:

1. Your currency amount shown on the slip is an approximation...the actual conversion will be done by your bank (then you ask why am I being asked to accept the conversion as final and they hae no answer)

2. We have no control over it..it is done automatically by the terminal (as noted above, because of the mc/visa reg, the terminal asks the clerk before completing the transaction if the customer wishes this "service")

3. Sorry the transaction has been done already and cannot be voided (wrong..any transaction on a pos terminal can be voided..sometimes cashiers "accidentally" enter the wrong amount (inveriably more than it should be)..oops sorry I'll void the transaction)

4. No speak English (done in Italy, Spain where this scam is being implemented)

5. Why are you making a fuss, it's a better rate than the bank gives..go out and check the rate the bank is givin (not told that's the rate on cash which is always higher than the rate banks convert cc's on)

6. Your bank adds a fee for converting currency..when done in your currency there's no fee (wrong, some banks have already implemented calling the fee a foreign transaction fee rather than a foreign currency fee..more will do so when the new fees are implemented by mc/visa)

I have had this scam attempted on me in Ireland, Scotland, Switzerland and Holland..never in England, Germany and France...as I understand it is becoming very prevelent in Spain and Italy (no speak English)...

Stand your ground, demand to see the manager..when they pull any of these lies, tell them to their face they are liars..if they continue to refuse to do the charge properly in local currency only do as robespierre suggested, circle the amount in euro (or whatever the local currency is), cross out your currency amount as listed, cross out the statement you accept the dcc, write local currency not offered and sign your name...tell the establishment you will be disputing the charge and it will be charged back to them but under no circumstances should you pay cash if they pull this stuff on you.

I've had it happen to me in Italy - about 2 years ago. Michael - that extra is sure adding salt to the wound.