vanne

I seem to remember a posting some time ago about which to choose when offered to be billed in dollars instead of euros. I believe the answer was it's better to be billed in euros -- I suppose because when they convert to dollars the store charges more than your credit card company will. Can anyone advise on this? Thanks.

Dukey1

It is called "dynamic currency conversion" and yes the merchant, or entitiy other than your CC issuer, makes the conversion at a rate which is most favorable to the entity, and not to yoo.

Generally speaking you can refuse this and demand that the merchant charge you in the local currency. If they continue to refuse to do so then write ON the merchant copy of the charge slip, "refused to offer in local currency" and also dispute it with your credit card issuer.

I have had at least one experience when it was a bit more difficult to refuse and that was when I rented a car at Heathrow Airport where Hertz had DCC <B>written into</B>the rental contract.

annhig

No - the best deal is to be billed in the currency of the country you are in.

the reasons are explained in full in this article:

http://www.thisismoney.co.uk/money/h...es-abroad.html

put simply, if you "choose" to pay in your own currency, you can be hit for extra fees. The merchant should give you the choice to pay in the local currency or your own, in which case opt for the local one. If you are presented with a bill which has been "helpfully" made out in your own currency, politely ask them to redo it in the local currency.

annhig

posting at the same time as Dukey.

We rented with Hertz in Germany and were charged in Euros. I wonder if that was a London thing. doesn't make it any better though. did you complain to your c/card co, Dukey?

anyegr

Always get the charge in local currency. If that's Euros, then get it in Euros. If it's something else, get it in that currency. Don't even think of trying to get billed in Euros in a country that doesn't use Euros, like England. A three-way exchange fee would be a very bad thing to get.

Since you tagged your question with France and they use Euros there, then yes, get the credit card charges in Euros in France.

vanne

I thought that was the case; we were at BHV and if I had pushed "1" I would be charged in euros and if I pushed "2" it would be in dollars. The cashier pushed slightly for dollars, but I chose Euros because I was sure I had read that here at some time. Thanks all for confirming what I thought.

Sarastro

If you take a look at your credit card agreements, those long boring documents that few read, you will see that foreign transaction fees apply to all charges made outside of the USA, even if the transaction is in dollars. Paying dollars does not save you foreign transaction fees.

The next question is the rate of exchange used in the dollar equivalent to the local currency. Credit card exchanges typically offer an excellent rate of exchange and charge you 1% for the service. DCC rates can be less favorable than the normal rates you receive from your own credit card plus you´ll pay for the DCC a conversion percentage.

Never accept a DCC offer. Both MC and Visa have provisions in their merchant agreements requiring merchants to offer local currencies. If a merchant requires you to settle in a currency other than the local currency and forces you to accept a DCC settlement, simply write ¨local currency not offered¨ next to your signature and contest the charge with MC or Visa. The merchant will be backed charged for the DCC amount and the settlement will be re-figured in the local currency.

Dukey1

Sarastro, it depends ON the credit card used. I always use my CapOne card when in Europe or for paying for things bought on a European website because I am NOT charged ANY foreign currency conversion fees.

Annhig, my understanding is that Hertz is one of the companies which "pioneered" the whole DCC idea and I believe it was in Ireland.

No, I complained and had a rather heated "Come to Jesus the Gold Hertz member" meeting with the manager of the Heathrow franchize and he saw my way of thinking. If he had not I might have been out of luck since by signing the rental agreement I was also agreeing to the DCC.

annhig

well done Dukey. I pity any London merchants trying the DCC trick on you next week.

greg

Simple answer is always get charged in local currency.

The "thisismoney" article referred above with 4% limit applies to UK cards. For U.S. cards, the fees are higher. Last months in Switzerland, I computed a 7% markup if I had accepted charges in U.S. dollar.

If you can do a conversion computation on your own, you can easily compare the two proposals, local and U.S. dollars, to see which is better. If you have a smart phone with data capability, enter the local currency charge in question and it will tell you the straight figure in U.S. dollars at that moment. To that add whatever your bank charges. 0%, 1%, etc to come up with what the charges would be in U.S. dollar. Now look at what the CC machine proposed you to accept. You see their "convenience" comes with a non-negligible price tag. If you don't have data capable phone, just look up the exchange rate before you leave hotel and feed that into a calculator or an app.

Adding to the insult of being hit with an unfavorable conversion rate with DCC, you also get hit with a foreign transaction fee from your bank. The CC companies used to call them foreign currency fee, but by changing the term from currency to transaction, they can continue to hit the users with the fee even if charged in U.S. dollars.

Suppose your card comes with a 2% foreign "transaction" fee.
- charge in local currency. You pay 2% over the official exchange rate.
- charge in U.S. dollar. You pay perhaps 7% DCC fee + 2% foreign transaction fee for the total of 9%.
Is it difficult to figure out which one you should choose?

Dukey1

The rate that will be USED by the CC issuer is generally pegged to the rate of exchange <B>on the day your charge is processed by the bank</B> and AGAIN whether or not you pay any currency conversion fees and also what exchange rate is used <B>depends on the credit card you are using</B>.