€ or $

Margaret Butterworth · Apr 25, 2018

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 · Apr 25, 2018

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 · Apr 25, 2018

Euro's.
Wish you well,Peter.

Margaret Butterworth · Apr 25, 2018

Scott...O said:
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 · Apr 25, 2018

Margaret Butterworth said:
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.

Deleted member 3000 · Apr 25, 2018

Margaret Butterworth said:
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 · Apr 25, 2018

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 · Apr 25, 2018

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

MikeyC · Apr 25, 2018

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 · Apr 25, 2018

Scott...O said:
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 · Apr 25, 2018

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

(I'll get my coat!)

JanelMcB · Apr 25, 2018

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

Sixwheeler · Apr 26, 2018

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

Margaret Butterworth · Apr 26, 2018

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?

Deleted member 3000 · Apr 26, 2018

Margaret Butterworth said:
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."

McGraneC · Apr 28, 2018

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 · Apr 28, 2018

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 · Apr 29, 2018

Local Cash is king when travelling.

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