€ or $

[Margaret Butterworth]

Just returned from Spain, where I was always asked "Euros or Australian Dollars" when paying by credit card. Which is the best option?

 

[Scott...O]

Whatever country you’re in ALWAYS pay in the local currency. Otherwise you expose yourself to the DCC exchange rate (Dynamic Currency Conversion). This is a complete rort, and you will end up paying about 3% more than you otherwise would.

 

[Peter Fransiscus]

Euro's.
Wish you well,Peter.

 

[Margaret Butterworth]

Whatever country you’re in ALWAYS pay in the local currency. Otherwise you expose yourself to the DCC exchange rate (Dynamic Currency Conversion). This is a complete rort, and you will end up paying about 3% more than you otherwise would.

Yes, that's what I did, but Visa then charged me to convert to dollars - as I discovered later when checking my bill.

 

[Scott...O]

Yes, that's what I did, but Visa then charged me to convert to dollars - as I discovered later when checking my bill.

Then you need to change your credit card.
There are many cards available that do not charge a conversion fee, and convert the transaction very close to the spot rate current at the time.
There are others, but one such card is called 28 Degrees.

 

[falcon269]

Yes, that's what I did, but Visa then charged me to convert to dollars - as I discovered later when checking my bill.

That has been the standard, but you still were better off than if you had selected Australian dollars. There now are many credit cards that do not charge a conversion fee. Find one of them for your next trip and you will save a little bit.

 

[John Sikora]

What you've tripped over is really a great credit scam on the part of card companies. Most are internationally based and charging a % (usually pretty high) to "convert" from anything to your local currency is really just legal theft. As others have pointed out, there are a lot of credit cards that don't charge foreign transaction fees. I know that in the states both Chase and Citibank have miles based cards that don't charge foreign transaction fees. If they don't then local currency is always better, if they do home currency is often better but usually the ones that have foreign transaction fees will either still charge you the fee or will have a very bad exchange rate.

 

[trecile]

Here's an article explaining Dynamic Currency Conversion and why you should avoid it.
https://thepointsguy.com/2015/06/dynamic-currency-conversion/

 

[MikeyC]

It is not the card companies at fault here. If you choose to pay in your home currency then the local retailer and/or bank are the ones who benefit from the worse exchange rate.
VISA and MasterCard apply a very competitive rate to foreign currency transactions and if you look up, say, VISA Europe then you can check their exchange rate for major currencies. For VISA Sterling/Euro was 1.1406 today which is pretty good.
When you use VISA's calculator you will note that there is a box to insert a converter percentage. This is where your issuing bank is charging you a fee.
As noted above make sure you pay in local currency. Insist on this as retailers must offer you this option. If your issuing bank is charging you it is time to change your provider. And the cost may be much more than 3% - see the link to a BBC article which states that charges may range up to 10%. Ouch!

http://www.bbc.co.uk/news/business-40702496

 

[natefaith]

Whatever country you’re in ALWAYS pay in the local currency. Otherwise you expose yourself to the DCC exchange rate (Dynamic Currency Conversion). This is a complete rort, and you will end up paying about 3% more than you otherwise would.

Just learned this new word (I'd never heard it before): "Rort - a fraudulent or dishonest act or practice", or "a wild party."

Interesting!

 

[MikeyC]

I suppose a dishonest blacksmith would sell you "rort iron gates"

(I'll get my coat!)

 

[JanelMcB]

All credit cards from Capital One do not charge a transaction fee for converting foreign currency.

 

[Sixwheeler]

ALWAYS pay in local currency, that way you avoid nasty shocks on spurious conversion rates and commission.

 

[Margaret Butterworth]

Thanks for all the info! Most enlightening! Now, I've rechecked my Visa bill from ANZ Bank and it says this:
09
APR
HOTEL SPA SINAGOGA HERVAS $68.00 EUR INCL OVERSEAS TXN FEE 3.27 AUD
-$112.23

Are they trying to pretend it's a government tax?

 

[falcon269]

Thanks for all the info! Most enlightening! Now, I've rechecked my Visa bill from ANZ Bank and it says this:
09
APR
HOTEL SPA SINAGOGA HERVAS $68.00 EUR INCL OVERSEAS TXN FEE 3.27 AUD
-$112.23

Are they trying to pretend it's a government tax?

I suspect TXN is their abbreviation for "transaction."

 

[Kathar1na]

I found this recent BEUC report on Dynamic Currency Conversion quite interesting. Although written from the perspective of BEUC, which is a European consumer association, it explains the situation quite well, and not only from the consumer's view, and includes global references, for example action by the Australian Competition and Consumer Commission and similar: DYNAMIC CURRENCY CONVERSION When paying abroad costs you more than it should

 

[McGraneC]

I use a Revolut card for transactions outside of my home Euro zone. It is a debit card that you top up and can use in the local currency, charges are very low. If it gets stolen or lost, it can only be used up to the cash amount you have in it. I find it useful.

 

[Desert Bruce]

Yes always pay in the local currency. Find a card that charges no conversion or ATM fees and you'll save enough for bottle of local wine.

 

[MichelleElynHogan]

Local Cash is king when travelling.