Which Currency

Englsh_Frank

I have recently arrived in Australia but am temporaily still using UK debit and credit cards. When making a purchase using the cards I am asked to specify f I wish to pay in £ or AUS$ - is there any advantage in selecting one currency or the other?

Fruit_and_Nut_Case

Englsh_Frank wrote: »

I have recently arrived in Australia but am temporaily still using UK debit and credit cards. When making a purchase using the cards I am asked to specify f I wish to pay in £ or AUS$ - is there any advantage in selecting one currency or the other?

The usual advice is to pay in Local Currency. You'll usually get a better exchange rate from Visa/Mastercard than you would if you let the merchant do the conversion.

P.S. Welcome to MSE :hello:

YorkshireBoy

Fruit_and_Nut_Case wrote: »

The usual advice is to pay in Pounds.

I think you're confused...or it was a typo, being as the rest of your post seems to contradict this statement?

Isn't the "usual advice" to always to pay in local currency? That way, the exchange rate used is set by the UK provider/card network. If you pay in pounds sterling the overseas retailer's merchant acquirer/network sets their own exchange rate, which is usually a much poorer rate...up to 6% or more worse.

Google 'dynamic currency conversion (DCC)" for more information.

chattychappy

Yep, always pay in local currency. The exceptions are:

1) you can verify the rate offered is better than what you'll get on your CC. Unlikely (even with the standard loading of 2.75%).

2) you really don't want to take the risk of a currency movement against you - but a pricey way of doing that!

3) expense handling is simplified if a purchase for your company.

By way of example, I just checked out of the Novotel Taoyuan. They print out a thermal paper receipt for signing. It is as follows:

Please select transaction currency:

1. [ ] GBP 30.02
FX Rate 0.0223703GBP/NTD
OR
2. [ ] NTD 1,342

This service is offered by the merchant's service provider, with FX rate at Visa rate plus four pt. four percent. I have a choice of currencies including NTD and agree to pay above total amount according to card issuer agreement.

Signature......................


You can tick either box - one showing the GBP amount or one showing the NTD amount. You give it back and they reprint a version for you to keep, showing your selection.

So in this example, it actually gives you the exchange rate they are using and the remark that the loading is 4.4% over visa rate. ***

Not the most transparent of examples - normally the exchange rate is expressed as GBP/NTD (ie 44.7 in this example), and writing 4.4% in words hardly catches the eye. But no pressure from staff and both choices equally displayed with no "default".

In other situations they might not show the rate or loading, just the amounts. For example in a Geneva duty-free shop, I remember they had a touch sensitive screen. There was a large "confirm" button with the GBP amount and a tiny button in a corner with a Swiss Franc amount. The staff member pointed to the big button and said "press her" and I pressed the small one. "Clever man" she smirked. No idea what the loading would have been!

** That would be the exchange rate at that moment, and I suppose the exchange rate could be slightly different when it hits my account. But these days I find this stuff usually goes through same day.

Fruit_and_Nut_Case

YorkshireBoy wrote: »

I think you're confused...or it was a typo, being as the rest of your post seems to contradict this statement?

Not a typo. A "senior moment". Now edited. Thanks!