Using credit cards -international travel

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
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brak
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Using credit cards -international travel

Post by brak » Thu Nov 07, 2019 8:58 am

I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars, assuming your credit card does not charge a transaction fee. Does the merchant have to honor this request, and if so what if any leverage do I have? Thank you.

ZinCO
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Re: Using credit cards -international travel

Post by ZinCO » Thu Nov 07, 2019 9:01 am

brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars, assuming your credit card does not charge a transaction fee. Does the merchant have to honor this request, and if so what if any leverage do I have? Thank you.
The choice is on the card reader in every case that I've seen. You don't actually have to tell the merchant which you are choosing. Also, I don't ever remember being asked when using Apple Pay but maybe because those were smaller merchants like restaurants and grocery stores.

neilpilot
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Re: Using credit cards -international travel

Post by neilpilot » Thu Nov 07, 2019 9:03 am

brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars, assuming your credit card does not charge a transaction fee. Does the merchant have to honor this request, and if so what if any leverage do I have? Thank you.
Actually it's best to always charge in local currency, rejecting dynamic currency exchange, even if you are using a card that does charge a transaction fee.

Theseus
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Re: Using credit cards -international travel

Post by Theseus » Thu Nov 07, 2019 9:04 am

brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars
I travel internationally quite a bit. This is reverse of my experience. I have CSR card. And charging in US$ rather than local currency saves me 5-10%. I check this every time I charge.

Topic Author
brak
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Re: Using credit cards -international travel

Post by brak » Thu Nov 07, 2019 9:09 am

I am using a credit card to pay for lodging in Costa Rica. The hotel has sent me a PayPal invoice and says I will be charged in USD as it is a US PayPal account. Anything I can do? Thanks.

German Expat
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Re: Using credit cards -international travel

Post by German Expat » Thu Nov 07, 2019 9:09 am

Theseus wrote:
Thu Nov 07, 2019 9:04 am
brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars
I travel internationally quite a bit. This is reverse of my experience. I have CSR card. And charging in US$ rather than local currency saves me 5-10%. I check this every time I charge.
Do you have some data points? My experience is the opposite in all instances I saw. The exchange rate gets padded quite a lot if you get charged in USD and never to my advantage.
Also in some circumstances merchants try to sneak you a dynamic currency conversion in under the radar. Happened to me quite often in China and then it is usually too late to argue. Each time I got a substantially worse exchange rate.

scophreak
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Re: Using credit cards -international travel

Post by scophreak » Thu Nov 07, 2019 9:10 am

Theseus wrote:
Thu Nov 07, 2019 9:04 am
brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars
I travel internationally quite a bit. This is reverse of my experience. I have CSR card. And charging in US$ rather than local currency saves me 5-10%. I check this every time I charge.
I think you are mistaken on this. On a recent trip to Spain, the final charge on my CSR was the cab ride to the airport. The cabbie selected (without my consent) the option to charge in USD. Doing the currency conversion from Euro myself using the exchange rate used for that date on my other CSR purchases that were made in Euro, this option was certainly not in my favor as I was charged measurably more USD than the simple CSR exchange rate.

Luckywon
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Re: Using credit cards -international travel

Post by Luckywon » Thu Nov 07, 2019 9:16 am

Theseus wrote:
Thu Nov 07, 2019 9:04 am
brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars
I travel internationally quite a bit. This is reverse of my experience. I have CSR card. And charging in US$ rather than local currency saves me 5-10%. I check this every time I charge.
My experience in several countries has been the opposite. I have always found that charging in US dollars was more expensive to me.

nguy44
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Re: Using credit cards -international travel

Post by nguy44 » Thu Nov 07, 2019 9:17 am

I have traveled internationally a lot, primarily Asia and the Middle East, and always request the local currency be charged. It can make a big difference, especially on large purchases. I have never had an instance when the local currency was more than what they would have billed in USD.

Many places we travel that accept cards will ask which way you prefer, we always say local. If they do not ask, we request it, and have not had an issue. There are unfortunately some places that will only bill USD. For example we found this will rental cars in the Middle East.

Goal33
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Re: Using credit cards -international travel

Post by Goal33 » Thu Nov 07, 2019 9:18 am

Yes I hate this. Causes a bunch of confusion.

If I don’t say anything, most of the time they just hit USD since they haven’t seen a screen like this before or most others non suspecting folks request that.

If I say something, sometimes they know what I mean, other times they get confused because either their processer doesn’t ask for it, or they are just clueless.

Rarely does the transaction just go smoothly.

FWIW, I’ve only encountered this in UK and Ireland. Other countries seem to default to local.
A man with one watch always knows what time it is; a man with two watches is never sure.

BuddyJet
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Re: Using credit cards -international travel

Post by BuddyJet » Thu Nov 07, 2019 9:18 am

brak wrote:
Thu Nov 07, 2019 9:09 am
I am using a credit card to pay for lodging in Costa Rica. The hotel has sent me a PayPal invoice and says I will be charged in USD as it is a US PayPal account. Anything I can do? Thanks.
Your case is different. Since it is a US paypal account, your payment has no foreign exchange being done. You pay in USD and they receive USD.

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lthenderson
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Re: Using credit cards -international travel

Post by lthenderson » Thu Nov 07, 2019 9:21 am

If given the option, I choose to be charged in local currency. Perhaps it is the countries I go to but I'm rarely given the choice. The times I have been given a choice were for bigger ticket items like hotel rooms. But for everyday items like food, fuel, shopping, etc., I almost never get asked.

JackoC
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Re: Using credit cards -international travel

Post by JackoC » Thu Nov 07, 2019 10:07 am

Theseus wrote:
Thu Nov 07, 2019 9:04 am
brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars
I travel internationally quite a bit. This is reverse of my experience. I have CSR card. And charging in US$ rather than local currency saves me 5-10%. I check this every time I charge.
Definitely not true of my Bank of America Preferred Rewards card (no foreign transaction fee). I'll give specific examples from very recently. Oct 31/Nov 1 meal charges of EUR 224.30 at one hotel in Ireland were charged as $250.61 on the card, 1.117 USD/EUR, almost exactly same as 10/31 USD/EUR interbank midpoint point on daily graph on Yahoo Finance site. Nov 3-4 meal charges at another hotel EUR 135.70 charged as $151.36 on card, 1.115, v. avg of interbank midpoints on the daily graph for those two days of 1.117 and 1.113. IOW there's tiny profit at most on those FX rates for BOA: any bank giving a rate 5%-10% better than that would be losing basically that much, which is not plausible. Whereas many things I've read, I don't personally ever charge in USD because I've seen that FX rates on that card are consistently close to interbank midpoint, say there can be several % or more profit for the merchant and/or their bank in the FX rate you get if you tell the merchant to charge you in USD.

There could conceivably be particular countries or cards where this doesn't hold but clearly true in case of that card in developed country currencies I've charged in, which also includes fairly frequent purchases of foreign books online from home in EUR, GBP, JPY, etc. The card rate is excellent, virtually no upside to use some other rate and again every reference I've seen says there's lots of downside.

On that recent trip some providers would ask if we wanted to charge in EUR or USD, some handed us the device to push one button or the other ourselves, some just charged in EUR without asking (which both those hotels did). Nobody tried to pull a fast one charging in USD without our permission.
Last edited by JackoC on Thu Nov 07, 2019 10:14 am, edited 1 time in total.

DaftInvestor
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Re: Using credit cards -international travel

Post by DaftInvestor » Thu Nov 07, 2019 10:13 am

neilpilot wrote:
Thu Nov 07, 2019 9:03 am
brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars, assuming your credit card does not charge a transaction fee. Does the merchant have to honor this request, and if so what if any leverage do I have? Thank you.
Actually it's best to always charge in local currency, rejecting dynamic currency exchange, even if you are using a card that does charge a transaction fee.
Same applies if you pull out local cash from an ATM with an American bank card. A lot of the machines now will ask you if you want to pull out the cash using an amount converted to American Dollars and accept their "conversion". It looks better to tourists because they see they are pulling out some American amount from their account that they understand but what happens is that you end up getting a horrible conversion rate PLUS a fee. Decline. The wording is very complicated so don't feel rushed when at the ATM machine - if you need time to think cancel the transaction and start over.

neilpilot
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Re: Using credit cards -international travel

Post by neilpilot » Thu Nov 07, 2019 12:03 pm

Goal33 wrote:
Thu Nov 07, 2019 9:18 am
Yes I hate this. Causes a bunch of confusion.

If I don’t say anything, most of the time they just hit USD since they haven’t seen a screen like this before or most others non suspecting folks request that.

If I say something, sometimes they know what I mean, other times they get confused because either their processer doesn’t ask for it, or they are just clueless.

Rarely does the transaction just go smoothly.

FWIW, I’ve only encountered this in UK and Ireland. Other countries seem to default to local.
Funny that you should mention the UK, since my experience both last year and a few months ago was entirely opposite.

We spent 3 weeks in the UK in September. There were dozens of charges on my MC (and a few on my Visa). Most were restaurants, but there were may others including a rental car and 2 ATM withdrawals. Not once did the charge default to USD. In fact, except for one ATM withdrawal, dynamic currency exchange wasn't even offered as an option.
Last edited by neilpilot on Thu Nov 07, 2019 1:55 pm, edited 1 time in total.

Theseus
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Re: Using credit cards -international travel

Post by Theseus » Thu Nov 07, 2019 12:11 pm

OK. My original post was hastily written. All of you are correct. What I should have said is that charging in local currency saves me 5-10% rather than US$. If I accept their conversion to US$ it is always a bad rate. And same applies to ATM.

criticalmass
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Re: Using credit cards -international travel

Post by criticalmass » Thu Nov 07, 2019 2:14 pm

brak wrote:
Thu Nov 07, 2019 8:58 am
I have read when traveling internationally, it is best to have the merchant charge in the local currency rather than US Dollars, assuming your credit card does not charge a transaction fee. Does the merchant have to honor this request, and if so what if any leverage do I have? Thank you.
1.) You are better off by getting charged in local currency. DCC rates to convert to your currency are marked up, which is why they offer this “service” in the first place. It is a cash cow for banks and merchants.

2.) Visa and MasterCard allow dynamic currency conversion (DCC) to get charged in your home currency.

3.) Visa and MasterCard require merchants to give the cardholder the option of NOT using DCC. In other words, they may not require DCC per their merchant agreement.

4.) Many merchants will not respect #3 and employees may not even know how to stop it. Ensure you cross out any receipt language that you accepted DCC before signing. Marriott and Avis are known headaches for DCC.

5.) American Express does not permit DCC. If in doubt, use Amex, even if there is a FTF.

6.) Merchants and acquiring banks usually split the excess profits generated by DCC. There is a ton of money to be made with this.

7.) USA stores/merchants often use DCC too. Best Buy is one example. Non USA cards get charged in home currency by default.

8.) Watch POS prompts carefully and choose carefully. Same advice for ATMs, which also try to offer you DCC.

9.) If you get charged DCC anyway, initiate a chargeback once home. Hopefully you crossed out any receipt language that you accepted DCC before signing, per #4 above.

10.) If your card has a FTF, you still get charged the FTF even if you use DCC and get charged in your own country’s currency. That’s because banks changed the old currency conversion fees to foreign transaction fees to ensure they still can charge a fee if there is DCC. (Or if you are in a USD country like Equador or Bermuda.)

11.) For PayPal, you may not be able to avoid this, since the transaction is handled by PayPal before sent to a card. Caveat Emptor.
Last edited by criticalmass on Thu Nov 07, 2019 5:29 pm, edited 1 time in total.

ZinCO
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Re: Using credit cards -international travel

Post by ZinCO » Thu Nov 07, 2019 2:50 pm

criticalmass wrote:
Thu Nov 07, 2019 2:14 pm

7.) USA stores/merchants often use DCC too. Best Buy is one example. Non USA cards get charged in home currency by default.
Thank you for bringing this up. I was going to say, lest you think this is all a grand scheme to fleece American consumers overseas...

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