The value of no foreign exchange fees and international shenanigans

Discussion in 'General Discussion | Credit Cards' started by tommy777, Aug 12, 2013.  |  Print Topic

  1. tommy777
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    tommy777 Co-founder

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    Folks,

    Nothing new here, just some observations made.

    With the rollout and soon to be the end of foreign exchange fees, I thought I'd share some of my experiences the last few months on multiple international business trips.

    A lot of hotels, restaurants and stores are trying to trick you in to charge your purchase in USD rather than local currency. Even if you have foreign exchange fees on your card, I would never recommend charging anything in USD.

    Here's why: I bought some duty free items in Frankfurt, the total was 349 Euros. I had the option of getting charged that or 496 USD (the USD amount shows up on the screen at most vendors). I chose Euro and it ended up posting as 459USD. the merchant charges a fee of 2-5% fee in addition to a really lousy exchange rate. The vendor was Heinemann, the largest duty free operator in Germany.

    At the Sheraton Brussels Airport, I had the option of being charged 155 USD or 108 Euros. I was charged 144USD on my credit card.

    A restaurant in Lichtenstein charged me in USD as a default on the machine. I declined to pay and they issued a refund and charged me in CHF and saved 8 USD on a 102 dollar bill.

    All in all, I've seen an up to over 10% premium charge by offering a "service" of charging in your own currency. So even with a 2-3% foreign exchange fee on your credit card, buyer beware and decline the generous offers from vendors out there.
     
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  2. jbcarioca
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    jbcarioca Gold Member

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    That is excellent advice. The Dynamic Currency Conversion (DCC) as that is called, it a major ripoff where ever it is done. There is no defined upper limit for the charge which is NOT a FX charge because you'll still pay whatever your card issuer charges also. It is simply an additional merchant charge to denominate, not charge, the transaction in the home currency of the card. The DCC is officially an option, and customers must be allowed to decline it. In some places and countries it can be difficult to decline, especially China. BTW, HSBC China charges DCC on ATM transactions, but Premier members can get the charge reversed by asking their client representative when the transaction posts.

    You may have to argue but merchants must permit you to be billed in local currency, always the best choice.

    A personal note. At the St. Regis in Lhasa, Tibet I had to spend almost two hours flighting to eliminate DCC. In the end they did not know how to do that, but they did give me a 5% discount on my bill, which was actually their DCC markup. As Tommy mentions the charges can be 10%, in some cases even more.
     
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  3. tom911
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    tom911 Gold Member

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    I'm pretty cautious about saying "I want to pay in Euros" when I'm in Europe and haven't had to do battle this year. I'm just back from a 12 day trip to Barcelona and Lisbon and at every meal my group was successful in having the waiter hit the override button on the portable credit card readers to bypass dollars and be billed in Euros. Sometimes it was just as simple as clicking "1" for dollars or "2" for Euros. All my hotels, whether prepaid or paid at check-out, were paid in Euros, too.

    The one area I have run into problems the last few years has been on prepaid hotels rates. This has happened in both the U.K. and Portugal and I was able to resolve them every time with a refund and rebilling or some type of hotel credit. I've found a lot of hotel clerks have no idea what DCC is, let alone how it impacts exchange rates---they think they're doing a great service for the customer. One hotel in Berlin had a DCC sign on the counter advertising this service (and that was a property that billed me in dollars at the counter automatically and had to reverse it---initial employee didn't know how to do it and needed assistance from a second employee to do that).

    You really do need to be on guard. On my last China trip I paid everything in cash just to avoid being taken advantage of there. That's the single country I've read too many stories about that I didn't want to even be in a position to battle with them on the issue.
     
  4. edekba

    edekba Gold Member

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    Huh what Rollout & end of FoRex?

    Otherwise great advise
     
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  5. MSY-MSP
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    MSY-MSP Silver Member

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    From what I recall the other issue with DCC and many CC issuers is even though it is "charged in USD" they convert it back to local currency and then back into USD. (I have seen that in the past don't know if it is still true). So you get the double whammy of paying ForEx USD-Local, then Local-USD.

    My answer to the pay in USD option is that my employer requires that all bill be paid in local currency in order for us to get reimbursed. I haven't had a problem with that ever, as most of the clerks seem to get that one really easily.

    Paying in USD where USD is not the local currency is never a good idea when using your credit card. In some countries though, paying in cash USD is a better deal.
     
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  6. jbcarioca
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    jbcarioca Gold Member

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    Just to clarify. DCC does NOT convert from the local currency to your home currency. It only states the invoice in terms of your own currency, which is then reconverted for merchant processing, where an actual foreign exchange rate is applied. Thus you do get a "double whammy" if you accept DCC. This does not apply with American Express which has no DCC but does have higher merchant discount rates. There is no way to make this sound simple because it was invented to deceive consumers into paying extra for exactly nothing at all other than the pleasure of seeing their own home currency symbol on their invoice. There are those who say the above is not true, arguing that the consumer will be actually billed the invoice amount in their own currency. If anyone believes that perhaps I can sell said person a nice bridge over the East River?
     
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  7. Counsellor
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    Counsellor Gold Member

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    I'm glad that works, but there is really no need to explain. Just insist on paying in local currency (and except for countries with weak or artificial currency where the law requires foreigners be charged in hard currencies, like the former Soviet Union) if you get push-back point out that the local currency is legal tender and ask whether they really want to explain to the police why they refuse to take legal tender.
     
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  8. Counsellor
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    Counsellor Gold Member

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    Another area that is problematic is rental cars, like Avis.

    The law is that the company must offer an opportunity to decline (or consent to) DCC. Avis in many European countries hides the statement that you will be charged in your home currency in the pages of mouseprint "Terms and Conditions" you agree to when you sign the contract, often in a foreign language. Then when you return the car, there is no opportunity to reject DCC.

    After I was burned by them once, I have since looked for that language, crossed it out (much to the consternation of the desk clerk), and wrote on the contract, "I demand to be billed in (Euros or whatever the local currency is)."

    So far that has succeeded, but I keep a copy of the contract until the credit card bill comes, just in case.
     
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  9. Jaimito Cartero
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    Jaimito Cartero Silver Member

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    If outside the US, I wouldn't pay USD on a credit card, even if it WAS the official currency. I've seen lots of cc forex charges, even in these types of situations.
     
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  10. jbcarioca
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    jbcarioca Gold Member

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    Technically the charges are 'foreign transaction' charges rather than 'foreign exchange' charges, thus allowing card issuers, who do not make the FX transactions themselves fir the most part, still to charge a fee. So, in countries that have the US$ as their official currency, you still can have a foreign charge. BTW, these $ to $ charges also exist for some such countries in current accounts and wire transfers. I detested paying those for my Bahamian accounts when I had property there.
     
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  11. othermike27

    othermike27 Silver Member

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    Returned from a European trip a couple weeks ago, and I encountered no instance of attempted DCC. This includes a handful of charges ranging in size from 15 to 1200+ Euros at: hotel, hertz rental, restaurants and shops. I was waiting for a bill presented in dollars, but it never happened - all billed in Euros to 2 VISA cards (CSP & AFCU) with no FTF and the USAA MasterCard that carries a 1% FTF.

    YMMV...
     
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  12. kwai
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    kwai Gold Member

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    Which one are you offering... there are several.

    My wife got hit with DCC in Changi a few months ago which resulted in $10USD more than what would have been charged otherwise. It was on a no FOREX card as well.

    She is now privy to the practice and knows to only accept signing receipts showing the local currency.
     
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  13. jbcarioca
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    jbcarioca Gold Member

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    That is the rule YMMV, I'm sure we all agree. Luckily this practice is diminishing, but it is still alive and well so constant vigilance is required, as Tommy said.

    I am offering the Brookyn, or course, but it is outside the range for many people so there is also the Willits Avenue bridge which is economical to "buy" and offers convenient access to the high points of the South Bronx. Others include the Washington bridge, famous for high loads and near-invisibility, also cheap. The George Washington can be a package deal with the Washington in order to offer total control over direct entry to NYC and Long Island from New Jersey. This is just a brief mention of a few that are on offer in only the NYC area. We also have many others including the Rio-antiRio in Greece, the Millau in France and the list goes on and on...

    Keep in mind that because of our unusual capacity to offer quit-claim deeds we can offer you our share of ownership in almost any bridge in which you're interested. These are all limited time offers and all properties are subject to prior sale of our interest, such as it is or is not, depending on the case.

    There are two specials today only for the first buyer of the day:

    1.TheAkashi Kaikyō Bridge(明石海峡大橋Akashi Kaikyō Ō-hashi?), also known as thePearl Bridge, links the city ofKobeon the mainland ofHonshuto Iwaya onAwaji Island, inJapan. It crosses the busyAkashi Strait(Akashi Kaikyōin Japanese). It carries part of the Honshu-ShikokuHighway.
    Since its completion, in 1998,[1] the bridge has the longest central span of any suspension bridge in the world,[2] at 1,991 metres (6,532 ft)
    Akashi_Bridge.jpg
    This spectacular bridge is available today only for the first buyer of our quit-claim deed, available for the first Kiva lender who makes loans of $2,000 or more. Imagine the value!!!
    2.The world's longest bridge is the Danyang–Kunshan Grand Bridge in China, part of the Beijing-Shanghai High-Speed Railway. The bridge, which opened in June 2011, spans 102.4 miles (165 kilometers).
    http://googlesightseeing.com/2012/06/the-worlds-longest-bridge/
    This bridge, because it is rail only, is going for a bargain price, again today only. Our quit-claim deed for this magnificent technological achievement is available for only $3,000 in new Kiva loans. Imagine that!
    For both of these amazing offers you even have high odds of getting all your money back. You'll also receive, free of additional charges, an official email with an inauthentic signature giving you unquestionable rights to open, peruse and print the email. It is suitable for framing, too, and can be printed and reproduced on your very own printer. You do not even need a high resolution printer! Offers such as this one ordinarily come only from people using ISP's based in Nigeria, Nauru and other such places. This one comes from an ISP based near you, if you're based near me.
    note: this offer has no value of any kind, offers no value other than the proven satisfaction of making Kiva loans. Please ignore this caveat if you're so inclined.
     
  14. YULtide

    YULtide Gold Member

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    I occasionally get offered USD in HKG, which is odd because I don't use them at home. There really is no attraction offering to convert one foreign currency into another foreign currency. Quite the scam!
     
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  15. kwai
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    kwai Gold Member

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    I take exception to your offering of the GW Bridge as a born/bred NYer. Why would I want to go to Jersey?

    While the Brooklyn Bridge seems to change hands on a whim I've always been fond of the 59th St Bridge (damn you ex Mayor Koch). Awful entry on the Queens side (pot holes that can swallow a truck) and exit on the NY side (remember those squeegee guys?) but it was the free way to get in and out of Manhattan when we were kids. And still is....

    Price inquiries should never come after the declarations of affection, but all the same, does your firm handle this particular span?

    And will you take Cambodian Riel?
     
  16. jbcarioca
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    jbcarioca Gold Member

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    In order, addressing your quite valid issues:
    1. The GW bridge is very legitimate in the the tolls are charged as one enters the civilized world, while none are charged leaving it. Pity for the poor people who must transit, or worse, live in, New Jersey. Thus the GW bridge is on offer.
    2. The Queensboro bridge, immortalized by two Queens lads, one later a math teacher, the other remaining a singer, provide a certain pothole resistant grooviness to the 59th Street bridge. Several times walking across that span, I was reminded of the enduring delights of return to the civilised (that word again) world as I returned from Sunnyside to my home in Greenwich Village. We definitely do have this span on sale for the modest sum of US$5000 in Kiva loans.
    3. By way of clarification it is not a 'firm' but an 'unfirm' otherwise sometimes called 'scam'.
    4. We are pleased to denominate the transaction in any currency you wish using our DCC (Dastardly Cheating overCharges). Cambodian Riels are an option, your charge will be រៀល 40,000,000 a real bargain at only 105% or so higher than the typical bank rate. Your eventual charges will be made via PayPal for credit to your Kiva account. There will be a modest 15% additional fee for redenominating your transaction twice.

    Finally, we are pleased to be able to be of service to you in this matter and are further prepared, because you are our first customer of the day and are the first customer ever for this immortal span over the East (non) River, with no access to the famous, the magnificent Welfare Roosevelt Island and the former New York Lunatic Asylum building, the Octagon, a suitable place for you to be permanently housed where said institution still in existence, were you to accept this offer..
     
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  17. kwai
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    kwai Gold Member

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    Without access to Roosevelt Island and/or 'lifetime' status on the tram my people won't come to the table.
     
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  18. schnitzel
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    schnitzel Gold Member

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    I've got to say, I've only been presented with a USD bill in Europe very, very rarely. Not sure why you and I have this experience, and others have the reverse. I assume something in our cards codes them to USD to trigger the issue. I generally use a Chase card (Sapphire Preferred or BA). Anyway, the few times I remember it happening, I just said "No - in Euros" and it was changed and I was done.
     
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  19. kwai
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    kwai Gold Member

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    I've been seeing this more often recently in Thailand and Asia as a whole. My normal line is, "I refuse to sign any receipt that contains a currency other than _____ (local currency)".
     
  20. wiegelsa

    wiegelsa Active Member

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    I've been burned by Avis a couple of times but both times wrote Customer Service and got the difference back.

    A Marriott in Milan got me and I got my money back too.

    Bottom line is vigilance.
     
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