I just ordered some books from the French Amazon site and was quite surprised to find myself offered the opportunity to pay in US dollars by signing up for the "Amazon Currency Converter". For my purchase of 93.01 euros, I would be charged 132.93 US dollars. A quick check on google shows a current exchange rate equal to 127.66 US dollars.

Yes, I am a big fan of Amazon. No, I am not willing to donate five dollars to their cause for my own "convenience".

I'm thinking this is the first time I am encountering this but it won't be the last.

This basically represents the 3% foreign transaction surcharge that most credit card companies charge. Best bet is to use a card with no foreign transaction fee (such as Capital One) and charge in EUR.

Thanks for the information. I never thought about on-line purchases, but it makes perfect sense for them. What gets me is that when asked that question, for anyone unfamiliar with DCC (and for some who are), it sounds as though you should say yes.

But that's what makes it work.

Several points:

1. You have no way of really knowing at what exchange rates DCC will be executed. MC and Visa networks charge 1% above the mid market rates. Mid market rates are about as even an exchange as anyone can expect. It is unlikely the rate you end up paying by choosing DCC will be as favorable and certainly will not be better.

2. It is unlikely that the $132.93 includes the cut that Visa or MC will take for the foreign transaction. About one year ago Visa and MC both changed their customer agreements to charge a foreign transaction fee on any non US purchase regardless of the currency used in the transaction.

3. As foreign transaction fees must now be itemized on your credit card statement, expect an additional fee equal to that which your bank typically charges, usually an additional 1%-3%.

4. There is absolutely no advantage to the consumer to ever accept a DCC offer. If you are every forced to accept a DCC transaction, simply write on the receipt ¨local currency not offered¨ near your signature and contest the exchange rate used in the transaction with your card issuing bank.

Travelhorizons, I do use Capital One. However, it is my understanding that some banks will add their fees for a foreign transaction even after you have been charged in your own currency by means of dynamic currency conversion, so acccepting DCC does not just substitute one fee for another but adds them together.

That is true, because they still consider it a foreign purchase. I think B of A does that, but I am not sure, as I forget the details I've read or in my disclosures (I always use Cap One for foreign charges, almost always, definitely online I do). I also have a AAA Visa (run by B of A) and Amex, and I think one or both of them still assesses foreign transaction charges if the purchase is foreign, even if in USD. I think these places even do that when it is a country where the USD is a standard acceptable currency (like Panama).

I've found it varies a lot depending on the site. I have found that some hotel booking sites (Agoda for Kuala Lumpur is the most recent one I've used) use an AU$ exchange rate a couple of cents below my bank's CC rate, but when I worked out the sums after adding the bank's fee and CC fees there was less than a dollar's difference in a $200 purchase.

Because of the speed of forex variations the difference was reversed a few hours later when I booked again at the same hotel for a different two days. My bank's rate had changed and Agoda's rate had not.

That calculation will be different for each of us depending on your currency, your bank and your CC's rates and fees. I've found that in my case the rate on the booking site is usually acceptable, but I always check on www.xe.com before I purchase anything on the web in any case.

Cheers, Alan
http://loraltravel.blogspot.com/

I believe that Ryan Air uses DCC when one purchases tickets.

We rented an apartment in Paris and the agency insisted on charging in dollars if we paid by credit card (we have a card which does not charge a currency conversion fee).....so the agency basically got the fee.
When I questioned this policy, I was told we could wire the money if we chose to pay in euros. The bank fee for that would be higher than the 2-3% Paris Perfect took so we just used the credit card.....frustrating, but loved the apartment!

DCC goes to the merchant's provider. Foreign curr conv fee goes to your bank. You can be charged for both.

I don't like DCC and have always refused it, but there are times when exchange rates can be unstable and delivery (and therefore debit) delayed. So on very rare occasions, there are people who could get a better deal with DCC.

Last year when I was buying on Amazon Japan site with a UK credit card, I too was offered DCC - to pay in yen or sterling. I declined DCC as I routinely do, but on this occasion, had I accepted DCC, I'd have been better off, because between the transaction date and when it finally appeared on my online statement (about 2 weeks; card handlers in Japan often don't present charges to your card issuer for several weeks), yen had advanced almost 5%, beating the 3% exchange rate loading for DCC. Gambling on exchange rate movement is something I try to avoid!