Visa payment in dollars or euros?

Many times when paying with Visa I'm asked if I want to pay in dollars or euros. I have been selecting "dollars" but the fine print on the receipt is ambiguous about whether I am paying a commission. What do you recommend?

Posted by Ken
Vernon, Canada
17796 posts

Mark, As the others have said, always pay in the local currency (Euros / Pounds Sterling / Zloty / Koruna or whatever) as that provides the best rates. I noticed on my trip last fall that more hotels, etc. were providing the option to pay in my home currency, but I always declined. In some cases, there was a "look" that suggested "you're making a mistake". They've undoubtedly clued in to another profit stream, so trying to squeeze as much as possible out of tourists. Given your location, you might like to attend the next meeting of the Rick Steves Denver group, as the expert group there will be able to answer any of your questions. This takes place the third Saturday of each month at a local Panera Bread outlet. The time and date are always posted in advance in the "General Europe" section of the HelpLine. Cheers!

Posted by George
Canada
836 posts

Always, always pay in euros - there is scalping going on if you select dollars.

Posted by Tom
Chicago
2876 posts

George is right. When you charge in local currency, the Visa interbank system will make the conversion to dollars. When you charge in dollars, the local merchant/vendor & perhaps his local bank will make the conversion - never in your favor and NEVER as good as the Visa rate.

Posted by pat
victoria, Canada
7829 posts

Mark, always Euros.
Google and read up on "dynamic conversion". Bascially you are losing out by having your money converted by merchant to dollars at THEIR rate, then by their bank converting it to Euros, then your bank by converting back to dollars.. I know that's not the best explanation ( which is why I said google and read up on it) but roughly speaking you are asking for another service ( by having merchant convert for you ) so , as nothing is free in life ...... lol

Posted by Laura
Virginia, USA
2902 posts

Always choose to pay in local currency. If you select "dollars" you will usually get a poor exchange rate. When you choose to pay in local currency, Visa does the currency conversion and you can be assured that the exchange will be done at a fair rate. Article on Dynamic Currency Conversion

Posted by Nigel
East Midlands, England
8761 posts

Oh you're paying, Mark. Through the nose. No commission but the rate will be pants.

Posted by Frank
Tresana, Highlands Ranch, CO, USA
10889 posts

The point that you are missing is that you will be 3% for a foreign transaction regardless of the currency by the credit card company. So you will be charged at least 6% for that transaction. It is never wise to take a charge in dollars.

Posted by Dina
Fontainebleau, France
893 posts

I'm not so fast on the "always use euros" based on an experience I had Wednesday when shopping with my parents. My mother was making a purchase in Paris. Gave the merchant her credit card and up popped the amount in $ and the amount in € for her to make a choice what currency she wanted the charge in. I whipped out my cell phone and checked what the current exchange rate was and compared. The difference between the interbank rate and what she was being offered was 3% - the exact same surcharge added by her credit card company for a charge made in euros. Now, she was going to claim VAT back on this purchase (we were in Galleries Lafayette, where it's easy to do), so she opted to take the charge in euros. Net: If your credit card company charges big fees (over 3%) for charges made in another currency, it might be to your advantage to take the charge in $.

Posted by Dina
Fontainebleau, France
893 posts

"The point that you are missing is that you will be 3% for a foreign transaction regardless of the currency by the credit card company. So you will be charged at least 6% for that transaction. It is never wise to take a charge in dollars." Frank - my Dad's a retired accountant who actually reads all the crap that the credit card companies publish. Some credit cards charge a "foreign transaction fee" but there are a few that charge a "foreign currency fee." Turns out for some AmEx cards, you're better off choosing $ if it's offered. See this article on "How to Avoid Foreign Transaction Fees." http://www.bankrate.com/finance/credit-cards/how-to-avoid-foreign-transaction-fees.aspx

Posted by George
Canada
836 posts

While Dina may be correct with respect to Amex cards, the reality is (in my experience) that fewer retailers, hotels, and restaurants accept Amex in Europe because of the HIGH point of sale transaction fees Amex charges it's retailers, hotels, and restaurants - the reason I stopped using an Amex card, in Europe, years ago. Amex will likely always be accepted at higher-end establishments while the mid-range places won't.

Posted by Marco
Oxford, United Kingdom
783 posts

Amex doesn't charge foreign currency conversion fees on some of its USA-issued cards either which would tip the balance the other way for those. For non-USA issued cards they are in general uncompetitive as they change the foreign currency amount into dollars first, and then into the currency of the card. Double whammy.

Posted by Andreas
Frankfurt am Main, Germany
2511 posts

Always select the local currency at the point of sale. They do that in every country. Their rates are great for them but really bad for you.

Posted by Brad
Gainesville, VA
7213 posts

I choose local currency. I also pick a credit card that charges reasonable fees (you can do better than 3 percent foreign currency fee). Right now my main card is Capital One Venture - but I review it every trip to see if there is a better option.