Credit card abroad

Denis_UK

I often use my Nationwide credit card in Spain. Just recently in supermarkets I am given the option of paying in GP pounds or Euros,which option should I choose and why ?

nomoneytoday

Depends on if your card charges commission or not.
If you're using a Halifax, Nationwide or Zero card then I would pay in local currency as the bank will get a better fx rate than the merchant

TadleyBaggie

If the exchange rates were similar between the supermarket and the bank issuing the card, then unless the card is commision free I would say the supermarket.

chattychappy

In fact I would say ALWAYS choose local currency unless you can verify rates on the spot.

In my experience of Dynamic Currency Conversation (as it's known), the shop loading is always worse than the 2.75%/3% loading that is typical on standard CCs.

I can imagine there might be a few exceptions, but I've yet to see them!

thenudeone

There is only one reason why shops offer this. It's so that they can put a mark-up on the conversion and make some more profit. It might still be better than accepting the card's exchange rate plus their handling fee but it's very difficult to work out in advance.

Plxply

I always thought the dynamic rate given by the shops are set by the acquiring bank, so they have no control over it and they don't receive any profits only the bank do.

Visa and Mastercard nearly always give the best exchange rates then any other I've seen (unless you trade large amounts of money), the rate you get from the shop is terrible. The native currency is always best to select, if you have a "bad card" you will sometimes even be charged for using the card abroad, even if it is in GBP.

zagfles

Plxply wrote: »

I always thought the dynamic rate given by the shops are set by the acquiring bank, so they have no control over it and they don't receive any profits only the bank do.

The banks usually offer the retailers a cut of the commission to "encourage" them to take up/offer DCC. Some dodgy retailers will convert the currency without even asking, others will lie and claim it's not possible to pay in the local currency.

These days I always play safe and tell them to charge me in Euros (or whatever the local currency is).

nomoneytoday

I do too. Last year a dodgy Holiday rep once changed the currency on a daytrip excursion to GBP and marked is as signed, before I could refuse the payment and change it back to EUR.

He made an extra EUR2 that day, but lost more commission over the week as I refused to buy any more excursions from him, and won't use that High Street travel company any more...

lisyloo

LOCAL currency everytime.
Let Nationwide do the conversion rather than the supermarket bank who will load you.
They offer this "service" for one reason and that's to make a profit circa 3%, but unless you have a calculator to hand you won't know how much it is.

chattychappy

lisyloo wrote: »

They offer this "service" for one reason and that's to make a profit circa 3%, but unless you have a calculator to hand you won't know how much it is.

Yep, though sometimes the rate is shown:

http://forums.moneysavingexpert.com/showpost.php?p=52348103&postcount=4

Loading was 4.4% here.

lisyloo

I think that's what I mean.
You would get a currency conversion rate shown.
So in order to work out the loading, you'd need access to VISA/mastercard/Forex rates and a calculator.
The loading is not generally printed explicitly in my experience.
So do we agree? you are saying it's the currency conversion rate shown and not the loading?

I'm normally pretty diligent but I don't go round the shops with the forex rates for the day in my pocket whilst I'm on holiday :-)