Check transactions carefully before completing @ ATMs

You would only see 'exchange rates' if you are being offered dynamic currency conversion, ie a withdrawal amount in your own currency. Decline this every time (always possible) and make a withdrawal in the local currency.

This is a useful post though as it illustrates a point I have made over and over, in that DCC may be offered as much by bank ATMs situated in the high street as by non-bank ATMs in airports, unlike what many journalists' articles lead you to believe. Guard up all the time.

Indeed. On our summer 2013 trip through London we twice were offered the chance to use DCC at bank ATMs. On our trip this spring, for some reason DCC never came up, even at my trial at the Travelex ATM in Heathrow 2. All withdrawal conversions checked when we got home and were proper interbank rates.

"You would only see 'exchange rates' if you are being offered dynamic currency conversion, ie a withdrawal amount in your own currency." Are you saying that this ATM was offering us the (unwanted) option of making a withdrawal in our own currency, dollars? I've never encountered that at a European ATM before.

Correct, Mona. The ATM wasn't going to hand you dollars, but it was going to show you and ask you to confirm a withdrawal amount in dollars, which never works in your favor. If you are withdrawing pounds, you should only confirm how many pounds you want. Then, the banks will make the conversion in the background, at the latest bank-to-bank rate, your bank may add a small mark-up, and you'll see the final results on your bank statement. The same theory applies for charging an item against your credit card in a foreign country; it should always be charged in the local currency. This is what we mean when we say to decline "dynamic currency conversion." See also http://www.ricksteves.com/travel-tips/money/card-fees.

If you're thinking "maybe the British bank will charge less mark-up than my home bank," the answer is no. And even if the withdrawal comes to them in dollars, some banks will still add fees when it comes through a foreign source.

Although I meant that the withdrawal amount was denominated in dollars rather than it dispensing dollar bills, there are ATMs that can do that, usually at a poor DCC rate. There are exceptions though; not maybe for dollars, but those with bank accounts in euro can withdraw euro notes from some UK ATMs without currency charges, again if they take care to avoid DCC.

When you withdraw local currency from a bank owned ATM the exchange rate is set by the network - generally Cirrus or Plus. You will not see that exchange rate. And you have no choice about that. You ask for 300 pounds and you get 300 pounds. Only shows up on your bank statement. If you are being showed an exchange or some type of dollar equivalent then it is something beside a standard withdrawal. From your comments I am concern that you just saw a different dynamic conversion rate rather than the true exchange rate. I would look close at your bank statement when it arrives. You may have still paid too much. As I remember when we used ATM in London last May, the first question asked was something like, "Do you want to see your withdrawal in dollars or something about dollars. We also answer No and went directly to amount of pounds we wish to withdraw. So we never saw what happens if you said yes. But if you saw an exchange rate, something else was going on.

Yes, thanks for posting this. It would appear that all the banks have been clued in that dynamic currency conversion is a money-maker, and everyone will be doing it. About 10 years ago, the big US banks figured out that people would believe that the 3 % foreign currency transaction was justified and look what happened.

DCC is becoming very common in many parts of Europe. It's pretty standard in Spain. You can always reject it - whether it's an ATM or merchant. It's never a good deal for the customer.

Just a mention that this is not a one way street - visitors to the USA have to steer round DCC as well.