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Exchange rate on hotel charges

Old Jan 15th, 2007, 07:09 PM
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Exchange rate on hotel charges

Recently, I prepaid 2 nights at the Prague Hilton. When the charge came through on my Mastercard, it appeared slightly high. Further correspondence showed that the hotel billed in Czech Koruna, but did not use the official exchange rate, it used a "sell" rate which I believe in incorrect. This results in am implied 3% charge plus an additional 3% charge from Mastercard which I expected.
Is a hotel required to use an official exchange rate( as opposed to a "sell" rate) when using local currency to charge on a credit card?
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Old Jan 15th, 2007, 07:29 PM
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sounds like 'dynamic currency conversion', where the merchant converts from local currency to dollars as a 'convenience' and then applies that amount to the credit card. THEN the card issuer tacks on the disclosed 'foreign currency' fee on top of that (even though the charge was converted to dollars by the merchant, the bank will still add their fee because the purchase occurred in a foreign country).
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Old Jan 15th, 2007, 07:45 PM
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I think Travel Nut is right on target.
This "dynamic currency conversion" is just one more ploy to jolt the gullible and unsuspecting lose from their money.

I consider myself to be a semi savvy traveler, but I got clipped on the dynamic currency conversion last year at a hotel in Stalden Switzerland. Without asking, I handed my Capital One card to the desk clerk and bingo, my bill was in dollars. I got home and figured up just how much I got clipped. I figure it was about 3%.

From that time onward, I always ask now if I can: Is my bill in x or in US $$? where x is some foreign currency.

If the answer is dollars, I ask for it in local currency. If that is not done, then I pay in cash if I have to stand there as a hostage while my wife finds a bank ATM.

(Or my wife stands as hostage while I go find the bank if it is night and we are in some place I don't know.)

I was royally annoyed last year, but by the time I woke up, it was too late.
Shows how it can happen to even those of us who are aware of such practices but are not fully alert at the time the scam is foisted on us.


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Old Jan 15th, 2007, 07:46 PM
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OOPS make that loose not lose.
You lose, but get jolted loose from your money.
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Old Jan 15th, 2007, 08:10 PM
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Hi bob, On 2006 I was charged in dollars in el Corte Ingles in Seville, however I had the operation reversed.
It is incredible one has to be ALERT....all the time.
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Old Jan 15th, 2007, 10:21 PM
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But the hotel billed in Czech Koruna, therefore the payment should have shown up on the CC statement as xxx Czech Koruna converted to yyy USD.

Is the 3% a fee for CC use rather than DCC?
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Old Jan 16th, 2007, 02:29 AM
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Hi dm,

As AR notes, if the hotel billed you in Koruna it should show that on your bill.

MC/Visa charge 1% for currency conversion. Anything above that is from your bank.

If your hotel billed you in USD, then using a "sell" rate is not illegal.

Your bank probably charged you a "service fee" for handling a foreign transaction, even though it was in USD.

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Old Jan 16th, 2007, 02:32 AM
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From my understanding, there is the official exchange rate, a buy rate (the number that the hotel or merchant will pay for your currency) and a sell rate (the number that you will pay when exchanging foregn cuurency for local currency.) Both the buy and sell vary from the official rate by about 3%.
Thus, if the hotel is billing at the sell rate (inadvertantly or otherwise), there is a double fee, since most credit cards disclose they tack on an exchange fee (MC is 3%)
I have corresponded with Hilton and await their answer.
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Old Jan 16th, 2007, 06:19 AM
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Hi d,

>From my understanding, there is the official exchange rate,....<

Sorry, but no.

There is the rate at which banks loan each other billions of dollars (usually overnight).

This is the one you usually see.

It changes minute to minute.

This is the rate that MC/Visa and Amex use when they change your charge in Euro to USD.

For small amounts, the exchange posts a "buy" and "sell" price that deviates from the bank rate in favor of the exchange.

Did your CC show:
Czech Hotel xxx Koruna $yyy
or just a charge in $.

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Old Apr 21st, 2007, 07:57 AM
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I plan to use my new Capital One Visa to pay for the hotel on my upcoming trip to Budapest. The hotel's website shows prices in euros only (not in Hungarian forints). Does that mean I may get charged for a 'dynamic currency conversion' from forints to euros? Should I ask the hotel to charge me in forints instead?
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Old Apr 21st, 2007, 08:43 AM
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Hi fifi,

Your hotel should confirm your reservation, and bill you, in local currency.

If they bill in Euro, you are more than likely being overcharged for the Forint to Euro conversion, on top of which you will have to pay a "currency conversion" fee for Euro to USD.

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Old Apr 21st, 2007, 09:27 AM
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If the hotel billed in Koruna - the "exchange rate" has absolutely nothing to do w/ them. Nothing. So many Koruna equals so many Koruna. No "exchange" is being done. The conversion is done when the amount is changed from Koruna to dollars by your own credit card company.

IF the hotel had billed in dollars - then you might be looking at DCC.

Now, if the hotel billed more Koruna than you agreed to - that is a whole different issue . . . .
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Old Apr 21st, 2007, 07:58 PM
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I agree with that. If the hotel billed in local currency, any buy or sell rate has nothing to do with it. They are billing in local currency, period, end of story. It's your credit card that is doing the exchange rate.

Mllefifi, some hotels in Central Europe quote rates in euro (especially online) just because that is a common currency understood by many of their customers. Most likely, it is just for notification/advertising purposes, and the charge will be in the local currency. The rate quoted in euro was probably just advisory at some time point, and isn't necessarily the one your card with use at a later date. I stayed in a hotel in Prague that only quoted rates online in euro, but the charges were solely in Czech koruna. When I emailed for the quote, I asked why that was, and it turned out that it was a hotel owned by Austrians, so that was the way they quoted rates. It didn't really have anything to do with how they charged my card, though, which was in koruna, and what they quoted had nothing to do with the way my CC converted it.

You can find out for sure by asking the hotel, however, and if you stay there, just tell them you want it charged in local currency.
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