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Visa credit card/debit card: Euros or Dollars?

when I have been using my Visa card in Spain they have been asking me if I want to pay in Euros or Dollars -- is there A net difference in the final charge on your lmonthly bill?


Posted by
9363 posts

Yes, there is a difference. ALWAYS use the local currency (in Spain, that's the euro). Otherwise, they do what is called Dynamic Currency Conversion. When they price something for you in dollars, it is done to their advantage - the merchant gets to choose the exchange rate instead of the credit card company. Here is how it is explained on Wikipedia (emphasis is mine):

The currency conversion is done by the merchant or his representative card processor at the point of sale instead of by the credit card company when the account is charged. The financial benefit to the merchant or their provider may be an incentive for the merchant to use DCC even when it would be disadvantageous to the customer. The merchant is now obliged to ask the customer if they want to use DCC but sometimes false information is given by the merchant to persuade customers to use DCC, such as that "DCC bypasses foreign transaction fees" or that "their machines automatically convert purchases to the home currency at the point of sale", which are both not true. Most credit card companies and advisers recommend that consumers not use DCC when it is offered to them.

Posted by
19160 posts

The loss on the conversion is often around 3%, but I assume it can be considerably more. I had three different people in Spain lie to me, insisting that it was the same price in dollars and euros. It absolutely is not.

Posted by
4620 posts

Smith,

Take heed of Nancy's good advice!

Although DCC ( Dynamic Currency Conversion) may sound tempting, don't agree to it, because you will get a lousy exchange rate.

Beware because you will also have this option when making cash withdrawals at ATM machines, so always decline DCC.

You may want to read Rick's advice here: https://www.ricksteves.com/travel-tips/money/card-fees

Bottom line... Avoid DCC ;-)

Enjoy your trip!

Posted by
928 posts

As you have heard, the merchants don't often use the term Dynamic Currency Conversion, but ask, "euros or dollars?" Always choose euros. The terms are equivalent.

Posted by
4524 posts

And just to add an additional point, many credit cards and banks add a foreign transaction fee of 1-3% to any foreign charges you make. That will not be negated by having the transaction done in dollars.

Posted by
21243 posts

Douglas is correct. IF you credit card adds a currency fee it will be added regardless if it is dollars or euro.

Posted by
5360 posts

And just to add an additional point, many credit cards and banks add a foreign transaction fee of 1-3% to any foreign charges you make. That will not be negated by having the transaction done in dollars.

Well, in my playing around with this, I can say that this is essentially correct, but technically incorrect.

Anything over 1% that you are charged for transaction fees by your bank or credit card, is solely fees charged by them, so yes, you will not see any savings by doing the transaction is Dollars, because your provider will still charge you.

However, if all you are charged are the mandatory network fees by the processors, which amount to about 1%, that fee is actually divided into two parts, a flat foreign transaction fee (pennies), and a currency conversion fee which is a % of the transaction. If DCC is done, you save the Currency Conversion Fee.

However, any cost they charge for conversion far outweighs the network conversion fee, so while technically you "save" the fee, they replace it with a heftier fee.

Bottom line...never take the DCC.

Posted by
22 posts

When your card is charged do you always have a choice of euros or dollars? Sometimes they ask and sometimes they don't.

Posted by
9363 posts

You always have the choice. If they charge you in dollars without asking you, ask them to re-do it in euros. I go to Spain fairly frequently, and when I have bought things, if they didn't ask, they charged me in euros. Just pay attention, and ask them to do it over if they do it in dollars.

Posted by
285 posts

As an example, let me tell you what happened to me today in Barcelona:

I went to a Caixa bank ATM to withdraw 200 Euro. I was charged a 5 Euro fee (ok, fine). BUT - if I had utilized the "convenience" of the currency conversion, my total withdrawal would have been equal to $245 US dollars (and change). Because I declined their "convenience" of currency conversion, when my bank process the withdrawal the total was $229 US dollars (and change).

Posted by
19160 posts

Yes, Caixa Bank is one whose ATMs charge fees. Ditto CX Bank. Perhaps it was only because I spent more time in Barcelona than anywhere else in Spain, but it seemed to have a larger percentage of fee-charging ATMs than the other cities.

I'm not sure that credit card transactions always offer the euro/dollar choice because, not having a PIN for my credit card, I frequently do not see the screen on the scanning device. Very often you are not asked, and on those occasions you may well still be charged in euros. Whether that is because the merchant hasn't set up his account to offer the undesirable option of paying in dollars or whether on that occasion the person performing the transaction just went ahead and chose euros, I have no way of knowing.

Posted by
7684 posts

Even Sagrada Familia tickets on line is asking euros or dollars. Beware--good question.

Posted by
4524 posts

When your card is charged do you always have a choice of euros or dollars? Sometimes they ask and sometimes they don't.

Sort of... To charge you in anything but local currency, they legally must ask you and allow you to decide. So often you will not be asked or have a choice; the transaction will just be done in local currency. But sometimes they don't ask and try and charge you in dollars. You have to be alert to what you are signing and insist on the transaction in euro if you notice it. You might get pushback but they cannot charge you in dollars if you don't want it.