Paying abroad

bunnyratdip

When paying by credit card abroad I am sometimes asked if I want to pay in sterling or the local currency. What should I choose? :eek:
Thanks

Consumerist

Pay in [STRIKE]Euros[/STRIKE].

[Edit: Sorry, that should have been "the local currency".]

See the MSE Cheap Travel Money page - fact 4

If they ask ‘Want to pay in Pounds or Euros?’, say ‘Euros’. If you’re paying on a credit or debit card and an overseas retailer offers to let you pay in pounds, reject it. It's called dynamic currency exchange and means the shop does the conversion, usually at a worse rate than your own card.

dzug1

Depends what card you are using but nearly always local currency.

With Tesco/Natwest/RBS cards (who charge well over 5%) sterling might be better

chattychappy

dzug1 wrote: »

Depends what card you are using but nearly always local currency.

Agree. The exchange rate is usually inferior and generates extra profit for the retailer. I last encountered this in Geneva. A screen had two touch sensitive buttons. A large one with the sterling amount big and bold, and a tiny one with the Swiss franc amount. The assistant said "push the big button". I pushed the small one. She replied "clever man"!!

dzug1 wrote: »

With Tesco/Natwest/RBS cards (who charge well over 5%) sterling might be better

I was talking to some American guys. They told me that their banks charge a % fee for "foreign" transactions. So even for USD, they pay something when they use their cards overseas.

I appreciate that by agreeing to DCC you avoid Tesco etc's dodgy forex rate. Are we sure that a cardholder is then only charged the amount shown and isn't still subjected to the 2.75% (or whatever) fee?

dzug1

chattychappy wrote: »

I appreciate that by agreeing to DCC you avoid Tesco etc's dodgy forex rate. Are we sure that a cardholder is then only charged the amount shown and isn't still subjected to the 2.75% (or whatever) fee?

As regards Tesco, etc, the reports I've seen on this forum say that they use a poor exchange rate and then apply the 2.75% currency loading as well. Other banks apply the 2.75% to a good exchange rate.

A DCC transaction would not involve any foreign currency loading but could attract a cash advance fee - just as a similar transaction at home would.

Not sure if those American guys were right - remember that even at home they get charged for using an ATM with most banks.

chattychappy

dzug1 wrote: »

As regards Tesco, etc, the reports I've seen on this forum say that they use a poor exchange rate and then apply the 2.75% currency loading as well. Other banks apply the 2.75% to a good exchange rate.

A DCC transaction would not involve any foreign currency loading but could attract a cash advance fee - just as a similar transaction at home would.

Not sure if those American guys were right - remember that even at home they get charged for using an ATM with most banks.

I took the context to be purchases only. (Never seen DCC in the context of ATMs.)

davidanddeirdre

Re dynamic currency exchange, ignorance is rife, I don't think Martin's message is getting through- the other day at Tenerife airport, waiting in the shop queue, (airport shops are of course a con their own right, but that is another topic) the two customers in front of me paying by card were asked if they wanted to pay in euros or £.... the first opted for £, and I was too slow to stop them but with the second, who was about to go for £ as well, I shouted "euros"! and explained why, which the chap was only too glad to follow.

chattychappy

davidanddeirdre wrote: »

Re dynamic currency exchange, ignorance is rife, I don't think Martin's message is getting through- the other day at Tenerife airport, waiting in the shop queue, (airport shops are of course a con their own right, but that is another topic) the two customers in front of me paying by card were asked if they wanted to pay in euros or £.... the first opted for £, and I was too slow to stop them but with the second, who was about to go for £ as well, I shouted "euros"! and explained why, which the chap was only too glad to follow.

Good for you!

Yep at one level, people need to be "educated" about DCC.

But at another level, consumers just need to be more savvy. They need to be better at maths and be able to do sums - if not in their head then at least with a calculator (even phones have them!) Consumers have become lazy - and that's how scams such as DCC get off the ground.

Impecunious_2

I went skiing in Austria last weekend. On the transfer to resort the tour operator offered customers the opportunity to buy ski-school and lift passes at the same price as would be paid in resort. The prices were quoted in Euro, but we were told that UK customers paying by card would be paying in Sterling, whereas its Irish customers would pay in Euro. When I queried this I was told that, because the company is registered in the UK it isn't allowed to bill its UK customers in Euro. Does anyone know whether this is the case, or whether I was being strung a line? When I travelled with the same company last year, I bought my passes on the transfer, and paid by credit card in Euro.
This year I declined their kind offer and bought direct from the ski-school and the lift company - in Euro. (And thus also avoided the 2.5% card handling fee they wanted to charge).

Roger1

The representative was talking tosh with a capital T (as my German master at school used to say) and was presumably wanting to up his/her commission by any means. To suggest that a UK company can only accept payment in sterling is so wrong from so many points of view (and illegal?) I wouldn't know where to begin.

You did well to buy locally in €.

lillytoad

set up and use the fairfx card as shown on this site as we are often in europe and have saved a fourtune in charges from our old creditand debit cards