Halifax Clarity Card and Dynamic Currency Conversion

troubleonline

Hi

Sorry if this query is a bit dumb but want to make sure am not missing anything...........and sorry for long post.

By way of background - I have always been careful when travelling to ensure that we do not pay over the odds for spending and exchanging cash. I always opt to pay in the local currency after reading of all the warnings not to use dynamic currency conversation due to the poor exchange rates. We also have Halifax Clarity card (purely for holidays) to ensure we don't have to pay fees and charges for using abroad.

However I have an incline that a couple of places we have stayed at last year in Thailand have actually been offering a pretty good exchange rate when they show us how much it would cost to pay in UK pounds. But I didn't have the MC exchange rate to compare at the time so never accepted.

The hotel we are staying in next month updates its currency exchange rates on their website daily. Today it is giving 55.01 baht to the pound. When I compare this to the rate of the Mastercard Currency Conversion Tool that applies to my Clarity card it is better (Mastercard rate is 49.94 baht to the pound today).

I appreciate that the rate on the website may not (in fact could well not be the same) as what they will use for the dynamic currency conversation but............... if on the day of checkout I compare the rate am offered to pay using dynamic currency conversation with the mastercard rate and the hotel rate is much better is there any reason why I shouldn't accept and pay in pounds in this specific instance?

As we will be paying a large percentage of our accommodation and extra room charges by card on checkout (at least £3000+) the amount of difference is potentially insignificant.

For example using the different rates above 150,000 at 49.94 will cost us £2,999 but at 55.01 exchange rate is will be £2,726 - a difference of £272!

Am I missing anything obvious here or am I potentially right that I might be better paying in pounds (as long as I check and compare rates carefully)? Am assuming Halifax wont charge anything for this....

Many thanks

DesG

dcc will _always_ be more expensive.

hotel desk rate could be better, (unlikely, but depends on how often it is updated and how much volatility there is).

The point is, they are not the same thing.

Fruit_and_Nut_Case

troubleonline wrote: »

...potentially insignificant...

Are you sure that's what you meant?

dzug1

DesG wrote: »

dcc will _always_ be more expensive.

.

Why? Whilst yes DCC is _usually_ more expensive it doesn't have to be, depending on how the DCC merchant sets his rates

troubleonline

Fruit_and_Nut_Case wrote: »

Are you sure that's what you meant?

No!! :rotfl:

reclusive46

dzug1 wrote: »

Why? Whilst yes DCC is _usually_ more expensive it doesn't have to be, depending on how the DCC merchant sets his rates

Generally it is but I agree soemtimes it isn't especially in volatile currencies.

zagfles

As I understand it DCC rates are not set by the merchant, they're set by the bank/company providing their card handling services. They detect the card's home currency and provide an offer to convert the currency dynamically.

I guess the hotel could independantly offer to charge in GBP at any rate of their choosing, but then that's not DCC.

It would seem odd for them to offer a better rate than the interbank spot rate though, for a freely traded currency, unless volatility explains it (wouldn't explain 10%+ I don't think!)

NiftyDigits

You could be looking at their Sell rate; 55 baht to get £1.

Let's have a look at the hotel webpage.

troubleonline

NiftyDigits wrote: »

You could be looking at their Sell rate; 55 baht to get £1.

Let's have a look at the hotel webpage.

Here it is and I do realise that there is nothing to suggest what it might be used for but if it were purely for customer info it doesn't even tie with XE.com! Might take it up with the manager when I get there!!!!

http://www.layanaresort.com/currency-converter.php

I check the US$, Aus$ and euro and only the USD come close on xe.com............

al25

Did you guys know that the merchant,in this case the hotel gets a commission if they are successful in convincing the customer to pay DCC?

chattychappy

Unusually for me, I've been roving around Europe a bit and getting cash out on Clarity/Zero.

At a number of cash machines at airports I've noticed the previous user has left behind their ATM receipt which shows they "fell" for DCC. The last one was at Prague where, I believe, the loading was 8.9% over the "network rate".

Can you imagine that... these poor sods lost 8.9% before they even got out of the airport! Even on a standard loading of 3%, they would have been 5.9% better off.