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When using credit card - should you tell merchant to use their currency rate or US?

Not even sure if the question makes sense. We are traveling to Switzerland, Italy, and Austria. I seem to recall reading that you should request the charge in Euro/CHF or Dollars, to get better rates. Which one would it be? Right now the dollar is weaker. Input on this topic is appreciated.
Betsy

Posted by
2736 posts

And the same holds if taking an ATM withdrawal--always have this computed in local currency and not their artificially poor exchange rate.

Posted by
730 posts

As above - use local currency.

Exchange rates used by merchant dynamic currency converters to your home currency for a purchase are generally favorable to the merchant - not the consumer. Your home bank, converting a charge from foreign to home currency, will use better rates.

The statement " Right now the dollar is weaker" is not relevant to the consideration. There is a range for that "weaker rate" that is used for individual transactions. The best rate at the time will likely come from your bank or credit card company, not the merchant.

If you want to play around with the concept, here's a good article. Halfway down the page it shows how even major credit card companies use slightly different rates: https://upgradedpoints.com/credit-cards/credit-card-foreign-transaction-currency-conversion-fees/ You can also see this if you walk past a physical foreign exchange booth at an airport - different buy and sell rates, find two booths and the rates will be different.

Posted by
10176 posts

The terminals offering $ are about a 10% markup. The terminal company gets most of the extra. In Switzerland even merchants told me to choose CHF, not dollars.

Posted by
61 posts

ORDTraveler - thank you for link to article. Clarifies many questions about CC and transaction fees, and DCC (a new one to me).

Thanks all for helpful replies.

Posted by
4509 posts

that you should request the charge in Euro/CHF or Dollars

You don't request anything or say anything, normally. Only say something if asked if you want the transaction processed in dollars. Decline (push that button) if offered by the device to have the transaction processed in dollars.

If you don't have a tap and pay card, request one now, or do whatever is required to have the card added to you phone payment system. You don't want to use the chip if at all possible.

Posted by
989 posts

The handheld terminal display will show 2 boxes and ask you to choose a currency. Always choose the local currency.

You will see this whether using tap payment or chip and pin.

Posted by
61 posts

I have a Bank of America Travel Rewards card. No foreign transaction fees, has tap and pay, and I believe chip and pin.
I should be good to go.

Posted by
23238 posts

You should at least another card or two for back up should something happen to your first credit card. We normally carry four credit cards -- two joint and one each individual.

Posted by
4509 posts

Chip is mostly gone, at least in Central Europe. The only way to pay with what is already set up on the counter is tap. If you need a chip they have to get out special equipment for you, and then when the signature part comes— we’ll you might as well have trumpets blaring and a spotlight on you. True at every location, 3 countries.

Posted by
307 posts

"I have a Bank of America Travel Rewards card. No foreign transaction fees, has tap and pay, and I believe chip and pin.
I should be good to go"

Don't assume nuthin'... ASK the merchant to charge you in Euros. LOOK at the machine to ensure that the Euros button is tapped. Otherwise, you'll be paying -- as noted above - a premium of easily 8% to12% on top of the tab.

Also, take the receipt, which is a pain in the neck, and LOOK at the amount you were charged. Twice in Spain this year we got charged more than the tab... One time was for 100 Euros more. We noticed it on the receipt. There was great embarrassment on the merchant's part. Much apologizing, and so on. But it happened in two different places.

Posted by
10176 posts

Not exactly true for every country, Tom.
First, European cards have to be inserted every 3rd or 5th transaction and we have to enter our codes to prove to our banks that we're legit. American cards don't have that requirement.
Second, in France we never hand our cards to employees. They give the terminal to us or it's on a counter. If the bank doesn't accept the tap, employees even turn their heads as we enter our codes.
Each country has a different limit on the amount we can pay by tapping. In France it's up to fifty euros. At fifty and above we have to insert the card and enter a code if it's an European card or sign if it's an American card. Other countries have higher limits.
Finally, since the employee doesn't handle the terminal during a transaction, or shouldn't be doing the transaction for you, the customer is the one looking at the two boxes on the screen when DCC is programmed into a terminal. Cards are never out of the customer's hand or control in western Europe, unlike in the US where restaurant staff picks up your card and goes out of sight.

Posted by
4509 posts

Bets: What I said was true for Czech Republic, Hungary, and I think Germany too but it all runs together. I charged everything and the reader out on the counter was tap only (I never saw dynamic currency or a choice of currency, in fact the displays on the machines sitting on the counter would not have supported this, too small), it was tap and then there was a 10 key input for if a PIN was required which never happened. Often the cashier took my card and inserted into a multi-purpose reader behind the counter, or the multi-purpose reader was presented for me to use. We never ran across a currency limit for tapping, even over $100 equivalent.

What I marvel at is how much things change between trips to Europe. A few years ago it was Americans trying to get true chip and PIN-- now that's irrelevant.

unlike in the US where restaurant staff picks up your card and goes out of sight.

While I prefer the convenience of this over the machine at the table and the tipping nuisance with that, a new wrinkle I ran across this week in Wisconsin was to scan the code on the receipt and pay that way, and tip easily, WIFI and smart phone and no card reading machine at all. Since getting a bill in Europe can be quite the challenge, even in tipping countries, I really look forward to every place using a system like this one day.

Posted by
27054 posts

Currency choice is alive and well in Bialystok, Poland, but at least the screen on the terminal is no longer totally in Polish, so you know what to choose--though there's a lot to read.

I'm being asked to sign the credit-card receipt for meals at my hotel. The one last night was under the equivalent of $35.

Posted by
367 posts

I just recently had a new pay experience in Norway. The amount I owed showed on the screen but then I had to actually type in the amount I wished to pay. This seems to be a way to enter a tip if so desired. After you type in your amount, you then press the green ok button. I had not experienced that before.

Posted by
350 posts

Chip is mostly gone, at least in Central Europe. The only way to pay with what is already set up on the counter is tap. If you need a chip they have to get out special equipment for you, and then when the signature part comes— we’ll you might as well have trumpets blaring and a spotlight on you. True at every location, 3 countries.

This really had my laughing :) Trumpets blaring. So true! In some ways, I don't get why US credit cards are typically so antiquated. Most merchants I use in the US now take tap, but there are still some (Lowes, Home Depot, some local ethnic grocery store) that still require the swipe card and sign process. Well, I NEVER use my real signature. I just squiggle a line. They don't care. Nobody cares! Nobody checks. In fact, there isn't even a place for me to sign my Apple credit card, so even if they wanted to check, they can't!

It truly is "trumpets blaring" isn't it? It's like going back using an old credit card imprinter (I had to google for the name!) and requesting that that be used instead of doing it digitally. Anyone remember those? https://en.wikipedia.org/wiki/Credit_card_imprinter