I wanted to post about the only negative we encountered while our child studied abroad. A Tour Company posted a Euro price for an activity in the right hand corner of their webpage stating starting from.... However, in the body of the webpage describing the various options for the activity all line items were quoted in Swiss Francs. My child confirmed the pricing with them for one line item which was quoted in Swiss Francs. The tour company told her the price would be lower than that because they get a discount. Then when we were billed, and she paid with our Visa card, which has a great exchange rate, the invoice was in Euros and they did their own exchange rate which was significantly higher than our Visa rate and they billed the credit card in US dollars. When I complained about the misleading price quotes on their webpage, they were less than accommodating. We were billed $75 more than expected. So after trying to reason with them, 1. They lowered the Euro price on their webpage in the right hand corner, but still had all the activity pricing in Swiss Francs. 2. Their customer service sent my complaint to someone in the organization who had no title, after I told them I would dispute the charge with my credit card company. 3. My credit card company is issuing me a credit for the difference of the price quoted and the invoice amount. So my message to everyone who books activities while traveling or while your college students travel, confirm all pricing upfront in writing, confirm which currency they will bill your credit card, and ask their exchange rate. If you have a great exchange rate with your credit insist they bill in the price quoted in the currency quoted on their website. My child could have booked this activity directly with the activity provider, who bills in Swiss Francs. She has had the best success when booking directly with Airbnb, Hostels, Activity providers, and Airlines. Sorry a bit long but just a word of caution. I was an international Sales and Marketing Executive for the bulk of my career and I am very familiar with exchange rates.
Posted by
Washington DC Region, USA
7053 posts
To sum up (and this applies to everything, not just studying abroad):
"Always execute credit card transactions in the country's local currency and use a zero foreign exchange fee credit card"
In your child's case, that would have been Swiss Francs. Companies advertise prices in Euros supposedly for the ease and benefit of customers but they take advantage of this by applying their own exchange rates and profiting off whatever padding they impose. Many customers don't realize this.
This is a valuable lesson to your adult child, although it sounds like she already did proper due diligence by confirming that the transaction would be billed in Swiss Francs (I don't know what went wrong here and why the company did something else).
I'm not sure what you mean by "they billed the credit card in US dollars". Every transaction abroad is billed in USD because that is your home currency, I assume. Ideally though, only the interbank exchange rate on the day of purchase dictates how much you ultimately pay (and no other fees on top of that).
Posted by
OP
13 posts
Hi Agnes, most of my daughters charges are billed in the currency of the country, then my credit card does the conversions and displays the exchange rate on my statement. Our credit card has no foreign transaction fees. The tour company posted Swiss Francs for the activity, did an invoice which they sent me in Euros (which was $75 more than the Swiss Franc price), but at the bottom they applied an inflated exchange rate and my credit card confirmed they were billed in US$. The credit card did not apply the exchange rate because the tour operator applied an inflated exchange rate and billed the credit card company in US$. Very disappointing when companies prey on college kids. Good news though that all other transactions for the past four months were handled correctly.
Posted by
Washington DC Region, USA
7053 posts
I understand what happened, and it was deceptive. Did the tour company market its products specifically at college kids? I think tourism-related businesses are equal opportunity - they prey on anyone who doesn't know how the system works, whether college kid or adult (and plenty of adults get caught up it this too). There are many, many discussions on this forum about DCC (dynamic currency conversion) and its pitfalls. Nonetheless, there is one silver lining here and it is that this is a good opportunity for young adults to sharpen their financial and travel skills, which includes money management and using credit cards abroad. If you went over the credit card statement with your daughter and showed her this specific example of how a business manipulates interest rates during currency conversions in its favor to pad profits, this is an invaluable lesson. There's nothing like learning by example. It's great that your credit card gave you a credit for the difference, so you didn't have to take a loss on this.
This is a good article related to this issue:
https://wallethub.com/edu/dynamic-currency-conversion/25576/
Posted by
Washington DC
27903 posts
I've occasionally been presented with charge slips denominated in US dollars even when I was right there at the hotel or restaurant and had previously asked to be charged in the local currency. Even in person, you sometimes have to dig in your heels to get things handled correctly. It's pretty clear that some businesses in the tourism sector lean on their employees to try to sneak DCC past customers. It's a big red flag if the employee never lets you see the hand-held card reader.
Posted by
OP
13 posts
Thanks for the article. Since my daughter is a finance major this may be a good topic for her to address in her upcoming finance classes.
Posted by
Green Bay
21090 posts
Yes, I've noticed the Swiss are very big on dynamic currency exchange and often try to charge in USD. It is getting to the point that you must specifically state that you wish to be charged in Swiss Francs. Swiss banks are even more fee-hungry than US banks.
Posted by
San Francisco Bay Area
5697 posts
My experience in Switzerland was that the card machine automatically defaulted to the card's home currency BUT the option to be charged in CHF was clearly stated on the screen and it just took one click to select it. So easy to just press "accept" without reading.