The great thing about many of the best travel credit cards out there is the no foreign transaction fee benefit when using the card abroad.
Still, a lot of people face confusion when using their credit card abroad, especially when you’re given the option to pay in US dollars vs the local currency.
At first glance, it looks like a nice convenience perk when your hotel offers you the option to settle your bill in US dollars, but it’s really a sneaky practice that has been coined the term “Dynamic Currency Conversion”.
The smart thing to do is to whip out the XE currency conversion app on your phone and just say no. Here’s why:
- The exchange rates are almost always worse.
- You’ll probably end up paying a tacked-on 2-4% fee you didn’t need to pay
- In the worst-case scenario, you could be stuck paying the fee twice, if you’re using a card abroad that does not waive foreign transaction fees in the first place (most charge 3%)
Keep in mind that most US credit card companies now charge a fee for all transactions made outside the US, whether it is in dollars or not (I learned the hard way while using my Club Calrson Visa at the Radisson in Aruba, even though everything in the resort is priced in US dollars; luckily I was able to have those fees removed as a courtesy with a quick call to US Bank).
The US-dollar “convenience” option is just a way for hotel companies, car rental companies, and other merchants to take more money by deceiving you.
Much like the outrageous taxi “credit card convenience surcharge” scam that have creeped all over the US (Vegas, especially), I really would like to see the dynamic currency conversion practice vanish!
Feel free to add your thoughts, stories, and comments.
Keep your receipts and double check your credit card statements, too! I recently came home from a trip to London where the hotel charged me in USD instead of GBP…contrary to my request at check out. The receipt showed the charge in GBP. For a multi-night stay in the center of London, it was a pretty big difference. Luckily, a quick call & email got me a refund for the over-charged amount.
This seems to happen to so many people!! Ahhh
I completely agree. If they charge you in USD, they are using **their** own exchange rate which normally is not as good as the bank’s.
It’s sad how many people fall for it too!! agh
Restaurants, hotels, and more have tried this trick on me, from Spain to Russia and beyond. Always insist you are charged in local currency no matter what they say, confirm it on the credit card receipt, and save the receipt. If you somehow ever end up being charged in US dollars, remember your right to dispute a charge.
Yes, receipts are key in these situation. Such a shady practice!
I have seen it when the rate was same as what you could get at an ATM (acceptable) and when it was the ripoff increase.
I’ve almost never seen an almost-equal rate :(
Omg….didn’t you steal this 10 minute tips things from points and pixie dust
LOL It was the first phrase that came to mind… no “harm” was intended to Kendra and her blog. I’ve written one-minute tips in the past (and even called them 10-second tips within the post). But I guess I will be more aware of “stealing” from now on….
I <3 Kendra anyway :)
http://justanotherpointstraveler.boardingarea.com/2014/05/08/one-minute-tip-will-help-maximize-category-bonuses-new-ink/
Ten second tips that is
Hey, Angelina, I think Kendra kinda “owns” the phrase “10 Second Tip”, at least here on BoardingArea. I realize it is not protected, but I think you should consider leaving that phrase for her to use on her blog. Just my 2 cents…
Ok thanks Gene point taken. If I got mad every time someone on BA used “miles in a minute” in a headline, I’d be one bitter person… but :)