Paying my way by credit card?

Jun 20th, 2006, 11:01 AM
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Paying my way by credit card?

Hi All, I'm planning a trip to Ireland next month with my family. A friend just mentioned to me that it's costly these days to pay by credit card in Europe and that many places tack on additional fees to your bill if you don't pay in cash or debit. Is this true? I was hoping to pay by plastic for most hotels, meals, etc., but I'm nervous I'll be hit with additional fees (she says up to 3% additional). Is there any truth to the rumor I heard? Thanks, Siobhan
SioCro is offline  
Jun 20th, 2006, 11:16 AM
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Capital One charges less than most others. What you need to watch out for is the DCC, Dynamic Currency Conversion. DCC is merchants charging you in dollars rather than Euro. Try doing a search on this board. There's been much discussion of it in the past couple of years.
CAPH52 is offline  
Jun 20th, 2006, 11:17 AM
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It depends on your card, actually.

There are several threads on this if you search, but here's the low-down:

She's talking about the additional conversion fee many cards add to the 1% Visa/MC charges for currency conversions on foreign transcations. Many are as high as an additional 3%. Some don't charge anything extra, such as Capital One and many Credit Unions. I think MBNA didn't charge, but are changing that. Amex charges a total of 2%, I think.

Check your CC rules for this. It's not a matter of credit vs. debit, it's for any transaction in a foreign country.

Also beware of Dynamic currency conversion, where the ever-so-helpful Irish merchant offers to charge your card in US Dollars, preventing the fee. Not so! It's a foreign transaction, you probably still get the fee regardless, and the exchange rate they use is usually poor, making it even more expensive. Insist on it being in Euros. If they say they can't, they are lying. MC/Visa says they must offer a choice in currencies.

If you have a card that doesn't charege the higher fees, use it as much as possible. Also check if your bank for the debit card charges a fee, they might. ATM use is common and usually cheap. Have fun!!! I'll be in Ireland on vacation on Saturday
GreenDragon is offline  
Jun 20th, 2006, 11:20 AM
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Hi SC,

It's the bank, not the purveyor, that is adding a "conversion fee".

ira is offline  
Jun 20th, 2006, 11:24 AM
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It was my understanding that even with the extra 1-3% fees you will still get a better exchange rate using a credit card vs. changing cash at a bank. The cards give you an insitutional rate vs. consumer rate for cash. While Europe uses debit cards a lot, they use them with PIN numbers. Most debit cards here don't require PIN numbers so if they're lost or stolen, you're sunk. Debit cards are not a good thing (at least for Americans IMO).

I don't know about places charging extra for using a credit card. If that was done here, you could report them to the card issuer.
mclaurie is offline  
Jun 20th, 2006, 12:12 PM
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Hi Siobhan:

Actually, a few places (B&Bs)will charge more to use CC and some won't accept them for payment. You may need to run to the ATM to pull out some money.

I agree with the others, when a merchant asks you if you want the charge in dollars or Euros, choose euros.

wojazz3 is offline  
Jun 20th, 2006, 12:21 PM
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And check your receipts. Because, unfortunately, they don't always ask.
CAPH52 is offline  
Jun 20th, 2006, 12:56 PM
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And, unfortunately, some merchants/hotels may try the "we have no choice" (but to bill you in your own currency) routine.

This is not true and do not accept anything other than being billed in the local currency.
Dukey is offline  
Jun 20th, 2006, 01:13 PM
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VISA and MasterCard are widely accepted in Europe, however no other card.
The highest acceptance is in France where almost everywhere credit cards are accepted. Very convenient to pay highway toll by card. No extra charge.
Credit cards are generally NOT accepted
- for very small amounts (maybe less than 20 Euros),
- by small businesses and shops,
- by discount shops and gas stations,
- by small museums.
traveller1959 is offline  
Jun 20th, 2006, 01:16 PM
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But note that you can's use a U.S. credit card to buy gas an an automatic machine. U.S. cards lack the smart chips on European cards and won't work.
Underhill is offline  
Jun 20th, 2006, 01:28 PM
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AMEX is accepted by some places in Italy.
LoveItaly is offline  
Jun 20th, 2006, 01:54 PM
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There is so much misinformation floating around about using credit cards and debit cards abroad.

Credit cards:

All Visa and Mastercards (no matter who they are issued by) have a built in 1% foreign currency conversion fee. This includes Capital One and Providian.

AMEX has a built in 2% foreign currency conversion fee.

In addition, currently the following card issuers add their own foreign currency conversion fee. Chase (2%), CitiBank (2%), Diner's Club (2%), HSBC (1-3%), MBNA (2%). Right now, only Capital One and Providian do not add an additional foreign currency conversion fee.

In addition to those fees, merchants can add a "dynamic currency coversion" ("DCC") fee. This a fee the merchant gets for charging your purchases in dollars. These charges can range anywhere from 0-5% of the bill.

These DCC fees can be charged by any merchant for any Visa or MC purchase including cards issued by all of the issuers listed above, including Capital One and Providian, but excepting AMEX, which has a closed network that does not allow such fees to be added by merchants. For this reason, for US citizens traveling abroad to avoid these fees, they should either use an AMEX card or never allow a foreign merchant to charge your purchase in US Dollars.

Finally, never use a credit card to get a cash advance. The card issuers charge additional fees for this service and the advances begin accruing interest immediately.

Debit Cards:

For debit card purchases and atm withdrawals, the foreign currency conversion fee charged by most banks is 1%, although Chase charges 3% to most customers, but HSBC has no charge if you use an ATM that is part of their network.

In addition, debit card purchases are also subject to the same type of DCC fees, so again, do not allow foreign merchants to charge purchases in dollars.

Finally, in addition to the foreign conversion fee, some banks and credit union charge an additional fee (ranging from 50 cents to $5) for using a foreign atm.
Jack is offline  
Jun 20th, 2006, 05:10 PM
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THANK YOU, everyone for the detailed input. I'll definitely check with my credit card company before I go and allot cash for smaller purchases. You've been a great help!!
SioCro is offline  
Jul 20th, 2006, 11:16 AM
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I have heard people say that capital one refunds the 1% fee. Or that they do not pass the fee that visa or mastercard charges them onto cuctomers. If this is true capital one is actually 0.
airfarce is offline  
Jul 20th, 2006, 11:25 AM
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People still fail to acknowledge the FACT that it isn't just the percentage of charges that make the difference. Some credit cards may not start with the same conversion rate. So if a card starts with a one percent worse exchange rate but then doesn't add on one percent, why is that better than a card that starts with a one percent better rate and then adds the one percent back on?

Also I was shocked on my recent trip to notice that my bank (Bank of America) had for the first time ever tacked on a one percent on all my ATM withdrawals in Europe. I was about to go in and raise Holy Hell, but when I looked at the XE rates for those days I discovered that the actual exchange rate had been DISCOUNTED by one percent. After the 1 % fee was added back on, it ends up I was given a total rate of exactly what the XE rate for the day was.
Jul 20th, 2006, 12:38 PM
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Good point about the conversion rates. Amex is bandied about as an alternative to the MC/Visa cards with 3% fee. However despite tacking on the lower 2%, the Amex often is more expensive to use since they set their own exchange rate (see the fine print insert). MC/Visa use the official exchange rate as the base.

When doing a same day comparison between a 3% MC and 2% Amex, my Amex card actually had the higher cost.
I use a MC with 1% now, but I had done used the others cards just as an experiment.
nibblette is offline  
Jul 20th, 2006, 12:58 PM
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Still some misinformation here even from people who think they know it all so here goes with information that is correct.

Currently, and I can go by the exchange rates and checking with oanda.dom, Capital One does not, repeat does not, impose the 1% fee of mac/visa or pass it along.....they use the exact interbank rate. You can check it out, I am looking at my latest Capital One statement...On 18 June 2006 for a purchase I made in Germany, the exchange rate they used was $1.25913 = €1...according to Oanda on 18/06/06 the official interbank rate was $1.26495=€1 so I actually did better...there are no hidden or other fees listed and the math checks out. Capital One does not pass along the 1% visa/mc fee period end of discussion.

2. In the USA, visa and mastercard merchant accounts have 2 important protections that apparently are not universal....the first is no merchant may surcharge for use of a credit card and number 2 no merchant may set a minimum for use of a credit card...unfortunately European card processors do not give their customers these same protections.

Finally mc/visa rules require a merchant trying to pull the dynamic currency conversion scam that you be given a choice of which currency to pay merchant may force you to accept this scam...I carry a notice from visa to that effect and believe me if any merchant ever tried to pull this garbage on me, I would show them this and if they refused to do the charge the proper way, I will write on the charge slip DCC declined and report them to the card company and insist their license to accept visa be terminated for failure to follow procedures. It has never gotten to that but I will do it if necessary.

People who try to impose dcc on their customers are nothing short of crooks if they don't give you a choice and follow your wishes.
xyz123 is offline  
Jul 20th, 2006, 02:22 PM
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< unfortunately European card processors do not give their customers these same protections. >

Small businesses lose a lot of money when people pay by CC.

If you pay by cash then the merchant gets all of that money, whereas if you pay by CC the merchant has to pay some of that to the CC company.

Wth small businesses that could be something like 5% of the bill - how would you feel if when withdrawing 100USD you only got 95USD.
alanRow is offline  
Jul 20th, 2006, 03:05 PM
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"Still some misinformation here even from people who think they know it all so here goes with information that is correct."

Hmm, maybe I'm just being paranoid, but I almost got the feeling that statement was meant to apply to me. But I certainly have not mentioned Capital One nor indicated any of the items which xyz123 is refuting.
As nibblette has pointed out, AMEX for one DOES use a different rate. Others do too. I may not know "everything" nor do I pretend to, but I do know as a fact that NOT ALL credit card companies start with the same exchange rate. Period.
Jul 20th, 2006, 03:55 PM
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Posts: 5,271
I was only referring to anybody who stated as a fact that Capital One charges the 1% visa/mc fee.

As far as cc minimums etc. here is my opinion on that.

When a business decides to take credit cards, the cost of commissions to cc companies is part of the price of doing business such as bank fees, rent whatever. Therefore if I go into any merchant taking credit cards, the price of credit card acceptance like all other fixed expenses of the business are taken into consideration when setting prices...3% of $1.24 is no different than 3% of $124 than 3% of $ if I'm paying for the fact the merchant takes credit cards, then I feel it is my perogative to use a credit card wherever and whenever it is taken for any amount no matter how small (although I never try to use a credit card for amounts less than $1; above that and absolutely...and I walk around with a noice from visa stating it is illegal in the US to set a minimum price for use of a credit card and have reported several merchants for not living up to the terms of their agreement with visa!

Finally, all banks using either visa or mastercard use the same basic rate to convert currency as the actual conversion is done respectively by visa and mastercard depenjding on which card is used...what differs is how much they chooise to rip off their customers whether it be simply passing along the 1% for adding other amounts as do near criminal outfits such as Citibank, Chase, Bank America...Amex as noted has its own processing and may use a different base rate to which it adds 2% but the same cahrge on a visa card at the same time will have the same basic conversion rate....what will differ is the amount it is surcharged...a visa card and a mastercard used at the same instant might have slightly different exchange rates.
xyz123 is offline  

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