"New" system of European places charging credit cards in US dollars.
May 31st, 2004, 10:33 PM
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"New" system of European places charging credit cards in US dollars.
First, let me suggest you read this full post before commenting.
In the past I've had on occassion a hotel tell me they would charge my card in US dollars. What happens is that they convert the Euro or pound or whatever to dollars at the rate they want and charge that amount. Then when you get your credit card, you find that it is much higher because the deposit was actually made into their bank in their local currency and the card company still adds their 1 to 3%, according to their policy.
But this trip I was surprised twice at restaurants (one in London, one in Cardiff) where they brought back my charge slip with "your account will be billed in US dollars at the current rate of . . . (in both cases just over 1.81, which is indeed a good current rate). I didn't make a fuss as they weren't big charges, but I assumed I'd actually be billed am amount about 3% higher, since Citibank charges me that. Surprise. When I bring up my actual Citibank charges, there is the amount in US dollars that is exactly what they said it would be. Apparently there is a new system whereby they actually do deposit in dollars! I hope it becomes a trend.
Incidentally on the same days as those charges, (which did divide out to 1.81 something) other charges divided out to a rate of about 1.87, which is the expected 3% higher. So it really is effective.
In the past I've had on occassion a hotel tell me they would charge my card in US dollars. What happens is that they convert the Euro or pound or whatever to dollars at the rate they want and charge that amount. Then when you get your credit card, you find that it is much higher because the deposit was actually made into their bank in their local currency and the card company still adds their 1 to 3%, according to their policy.
But this trip I was surprised twice at restaurants (one in London, one in Cardiff) where they brought back my charge slip with "your account will be billed in US dollars at the current rate of . . . (in both cases just over 1.81, which is indeed a good current rate). I didn't make a fuss as they weren't big charges, but I assumed I'd actually be billed am amount about 3% higher, since Citibank charges me that. Surprise. When I bring up my actual Citibank charges, there is the amount in US dollars that is exactly what they said it would be. Apparently there is a new system whereby they actually do deposit in dollars! I hope it becomes a trend.
Incidentally on the same days as those charges, (which did divide out to 1.81 something) other charges divided out to a rate of about 1.87, which is the expected 3% higher. So it really is effective.
May 31st, 2004, 11:25 PM
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Maybe they're trying to be tourist friendly to encourage Americans to spend their money.
Actually this is not new; it's been practiced at some places in Ireland for years, mostly touristy places. It has also been done in the Caribean. But in these places, it is a scam as they jack up the exchange rate, preying on the stupidity of people who think they are getting a bargain or saving on the surcharge imposed by some credit card companies. It's usually no different from the unsuspecting who think they are getting a bargain by companies such as AAA or Chase who advertise fee free currency exchange.
Glad to hear though you made out well!
Actually this is not new; it's been practiced at some places in Ireland for years, mostly touristy places. It has also been done in the Caribean. But in these places, it is a scam as they jack up the exchange rate, preying on the stupidity of people who think they are getting a bargain or saving on the surcharge imposed by some credit card companies. It's usually no different from the unsuspecting who think they are getting a bargain by companies such as AAA or Chase who advertise fee free currency exchange.
Glad to hear though you made out well!
Jun 1st, 2004, 01:43 AM
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I noted this was a standard offer while visiting Harrod's in London recently. They fully disclose a nominal fee at the time of the charge, which is included in the total. I've also seen this offered in Iceland at essentially no difference from the current interbank exchange rate. Since card companies regularly tack something onto the standard currency conversion anyway, it's no skin off the buyer's nose and it could actually be a small savings in some situations. It's certainly true that currency exchange can provide the basis for a scam, too. If people know the current rates, they can evaluate that for themselves. There would little basis for a seller to alter a charge after you've signed for a specific amount and it could be successfully disputed if that happened. As always, save the slips until things clear and you no longer need the documentation.
Jun 1st, 2004, 04:29 AM
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Patrick. I was wondering how you made out with the wreck you had on your recent trip.
I am sure with all of the questions about CDW people will really be interested in hearing what you have to say about the process of filling out forms, etc.
Thanks. Sherry
I am sure with all of the questions about CDW people will really be interested in hearing what you have to say about the process of filling out forms, etc.
Thanks. Sherry
Jun 1st, 2004, 04:34 AM
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Patrick. I forgot to comment about your credit card charge.
I am going to be renting a car in Austria with Europcar. The balance is due upon pick up.
I asked how the balance will be charged in Austria. It will be interesting to see if they charge my card in US Dollars or adjust the Euro charge so that the total comes out to the US balance. The rental cost is fixed at a specific cost.
I am going to be renting a car in Austria with Europcar. The balance is due upon pick up.
I asked how the balance will be charged in Austria. It will be interesting to see if they charge my card in US Dollars or adjust the Euro charge so that the total comes out to the US balance. The rental cost is fixed at a specific cost.
Jun 1st, 2004, 04:45 AM
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I have commented on this system on a recent thread, called 'Dynamic Currency Conversion'(DCC). It's a way for retailers and their card handlers to profit from currency conversions, rather than Visa/Master and your own card issuer. Rates are usually around 3% worse than interbank. Under Visa/Master rules, you MUST be given a choice whether you want to be charged in your billing currency or local currency, though this doesn't often happen. When I use my UK card abroad, I always make the point of saying, when I hand over the card, that I want to be charged in the local currency. Then they cannot use DCC, or I make them void the transaction and resubmit it.
Jun 1st, 2004, 07:58 AM
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Alec, I could be wrong, but I think you and I are talking about two different things, and if you re-read my original post maybe you'll understand. Yes, I'm familiar with that DCC thing you're talking about and as mentioned above I also ran into that in Ireland. But this is totally different. The retailer clearly is NOT profiting the 3% as the charge came through AT the interbank rate, not the usual 3% above as my credit card charges normally do. In this case, their charging me in dollars clearly saved me 3% from what my final bill would have been if they had charged me in pounds. Get the difference?
Regarding the wreck, Sher, it remains to be seen. Because we declined the CDW on our rental and then wrecked the car and are using Visa to cover the damage, we feared at first that they might even charge the full cost of the car on the Visa card until the problem is resolved, since we don't know yet if the car was considered totalled or not. The woman at Avis (we rented through AutoEurope) couldn't have been nicer and said they will work with Visa on the whole thing. So far, we've paid nothing, and ironically have even received a credit back for the two "unused" days of our rental. I have filed necessary forms with Auto Europe on the internet and did mail them copies of the police report, the final rental contract from Avis, and a picture of the damaged car (which I just happened to think of). When this whole thing is over, I will certainly post a detailed thread about the entire episode, as I've often wondered how this would work myself.
Regarding the wreck, Sher, it remains to be seen. Because we declined the CDW on our rental and then wrecked the car and are using Visa to cover the damage, we feared at first that they might even charge the full cost of the car on the Visa card until the problem is resolved, since we don't know yet if the car was considered totalled or not. The woman at Avis (we rented through AutoEurope) couldn't have been nicer and said they will work with Visa on the whole thing. So far, we've paid nothing, and ironically have even received a credit back for the two "unused" days of our rental. I have filed necessary forms with Auto Europe on the internet and did mail them copies of the police report, the final rental contract from Avis, and a picture of the damaged car (which I just happened to think of). When this whole thing is over, I will certainly post a detailed thread about the entire episode, as I've often wondered how this would work myself.
Jun 1st, 2004, 08:13 AM
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Thank you Patrick, and I will be looking forward to seeing what is the final outcome for you.
I have rented many times in Europe, with and without coverage from the car rental company. I am doing so again in Austria in a couple of weeks. I guess I am lucky as I have never had a mishap.
The cost of the rental car for twelve days in Austria was very expensive. It is really the most I have ever had to pay, about $640 for the twelve days without the CDW. The cost with CDW was very high and still had a deductible of about $800. And I consider the cost of the rental to be very good as I looked and looked.
So we shall see.
I have rented many times in Europe, with and without coverage from the car rental company. I am doing so again in Austria in a couple of weeks. I guess I am lucky as I have never had a mishap.
The cost of the rental car for twelve days in Austria was very expensive. It is really the most I have ever had to pay, about $640 for the twelve days without the CDW. The cost with CDW was very high and still had a deductible of about $800. And I consider the cost of the rental to be very good as I looked and looked.
So we shall see.
Jun 1st, 2004, 08:20 AM
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Intersting post, Patrick. I'll have to see what comes up on our trip this fall.
Glad you and your friend were not seriously injured and I do hope Visa and Avis can get you sorted out without further problems. I was just about to decline CDW and just use my Amex but now I'm having second thoughts so I'll wait for updates from you.
Enjoy the rest of your trip and travel safely.
Glad you and your friend were not seriously injured and I do hope Visa and Avis can get you sorted out without further problems. I was just about to decline CDW and just use my Amex but now I'm having second thoughts so I'll wait for updates from you.
Enjoy the rest of your trip and travel safely.
