Advertisement

Just Say No To Dynamic Currency Conversion

by on July 22, 2013 · 60 comments

in Points Guy Pointers, TPG Contributors

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

If you’ve traveled abroad lately and used a credit card (or even if you’ve just charged something from a company outside the US on PayPal) you’ve probably noticed the increasing prevalence of something called “dynamic currency conversion.” Basically, instead of just charging the amount in Euros or pounds or whatever currency the purchase is in, merchants give you the choice of “paying in dollars” and will show you the amount you will owe. While it may seem like a cool convenience in an increasingly complicated world where currency values fluctuate from hour to hour and day to day, as TPG contributor Nick Ewen details, dynamic currency conversion is just another added fee to the cost of traveling abroad – sort of like paying an exchange fee for changing your money – and should be avoided whenever possible. Here is what he found.

Always choose to pay in local currency.

Always choose to pay in local currency.

Dynamic currency conversion is an aspect of the international currency market that is relatively new and masquerades as an easy way to pay more for goods and services abroad. In essence, it capitalizes on the fears and ignorance of a casual traveler that they do not know just how much of their own currency they are spending. More and more, when you are out of the country and use a credit card to charge a purchase – anything from clothes or a meal to hotel rooms, you are asked whether you want to be charged in US dollars or the local currency. Paying in dollars is almost always a bad deal, though, so always choose the local currency. In doing so, you avoid the pitfalls of the phenomenon (and money-making scheme) known as dynamic currency conversion.

Just Say No

Some Americans, when offered the choice, might immediately assume that it’s much better to have the charge made in dollars. After all, that’s my home currency, right? The only problem is that the merchants are the ones calculating the exchange rate. In doing so, they are building in an additional fee that the customer may never explicitly see. Of course, this is all supposed to be disclosed up-front, but in every scenario I’ve been offered the choice, it’s always been that same simple question: “dollars or insert foreign currency here?”

The only real benefit to dynamic currency conversion is that it allows a customer to immediately see how much their transaction will cost in their home currency rather than estimating or trying to do the math on the spot. If you accept that option, however, you’re in for a rude awakening when your credit card bill arrives because these transactions inevitably tack on additional fees.

The additional fees can be as low as 1%, but they could wind up tacking on as much as 7% of the purchase price! Much of this goes directly into the seller’s pocket, and in fact, many companies that provide this service for merchants even tout the additional commissions in their promotional materials (see CyberSource’s Dynamic Currency Conversion resource) when selling them to merchants.

CyberSource’s materials even go so far as to say: “Plus, you can generate a new revenue stream – you earn commissions every time a customer selects DCC. This revenue can be used to offset the cost of acquiring foreign transactions.” It’s literally just a money-making scheme dressed up as an excuse for merchants to shift credit card processing charges onto consumers.

Here’s an example of how this might work. Let’s say you book a vacation to Iceland after being inspired by TPG and Eric’s recent trip. While shopping along the streets of Reykjavík, you find a great souvenir priced at ISK 12,000. However, the merchant may ask if you would like to pay in dollars, and quote you a price of $105. You quickly try to do the math, but you’re tired from the overnight flight and decide to just do it. You pay with a no foreign transaction fee credit card, but you just unwittingly spent more than you should have spent. If you had elected to pay in ISK, that purchase would cost $99.13 (exchange rates as of the time of writing). Instead, you spent an extra $5.87, a mark-up of almost 6%.

PayPal is Not Your Pal

There’s another spot where this can come up: sending money via PayPal. Based on my experience, this option only appears when you are using a credit card (rather than a bank account) to send money. Here’s a screen shot of a sample transfer:

PayPal Review Payment

You’ll notice that PayPal has calculated the amount you will send using the exchange rate of $1 = 0.741238€. Here’s the problem: that rate is lower than the current exchange rate!

At the exact time of this sample transaction, I pulled exchange rate quotes from numerous online sources, including Bloomberg, Yahoo! Finance, xe.com, and CNN Money. All of them listed the exchange rate as $1 = 0.7609€, making those 200€ = $262.85, a savings of $6.97, or roughly 2.5%. In this case, just as in the case with a local merchant, you are asking PayPal to make the currency conversion for you, and they are adding a fee in the process. Notice that this is never explicitly disclosed; it’s just listed as “PayPal Conversion Rate.”

However, just like with a merchant, there is a way to get around this. Notice that there is a link labeled “Other Conversion Options.”

PayPal Payment Method

That will take you into the following page:

PayPal Conversion Options

In addition to the PayPal rate, there is another option: to be billed in the currency of the seller. With this option, your card issuer makes the conversion, and it will always be at a better rate.

 

Here’s the funny thing about PayPal. Even when you select that option, the site will still claim that the payment will convert to dollars at the PayPal exchange rate:

Paypal Review Send

However, this is not the case. When you select to be billed in the currency of the seller, your credit/debit card network will automatically convert the currency using the prevailing exchange rate, not PayPal’s conversion rate.

I experienced this myself just a couple of months ago. I was sending money to a small boutique hotel in Antananarivo, Madagascar (the Lokanga Hotel, which incidentally is a fantastic property). My stay, breakfast, and airport transfer was going to cost 180€, and I was asked to send the money via PayPal. I went through the exact same process as above, and PayPal indicated that my payment would be $238.89. However, when the purchase actually posted, it only wound up being $232.81:

Screen shot 2013-07-21 at 2.33.21 PM

By electing the network conversion rather than PayPal’s rate, I was able to save $6.08, or approximately 2.5%. Even though the site told me I would be charged the higher amount, Visa converted the 180€ using their own (much more favorable) exchange rate.

There’s An App For That

One interesting way to see this in action is to download a currency conversion app on your smartphone (my personal favorite is the free one from XE). With XE, you can input up to 10 currencies and pull current market exchange rates (when connected to WiFi or a cell network, of course). The app then stores these settings so you can immediately evaluate a transaction when you are out and about and no longer connected to the Internet. Just type in the amount of the foreign currency and the app will calculate the cost in dollars (or any other currency). Much easier than trying to do the math on the spot.

Let’s say that you are visiting London, and you are considering purchasing an item for £49. Hearing your lovely American accent, the merchant asks if you want to be charged in pounds or dollars. Go ahead and ask how many dollars it would be, then type £49 into the app:

XE App

The quote will almost certainly be more than $74.85 (my guess would be somewhere in the neighborhood of $77). Then, politely ask to be charged in pounds, use a card with no foreign transaction fees, and walk out of the shop as an informed consumer, satisfied that you just outsmarted the dynamic currency conversion trap.

The bottom line is, Dynamic Currency Conversion is good for merchants but not consumers, so though it’s nice to know how much a charge will show up as on your credit card statement in your own currency ahead of time, it’s not so nice when it’s 2-7% higher than what it would be if you’d just made the charge in the foreign currency of the country you’re visiting. Essentially you’re wiping out any savings from using a card that doesn’t incur foreign transaction fees, so just say no.

I’d love to hear your personal experiences with this, so please feel free to share them in the comments section below.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Previous post:

Next post:

  • dl

    While we’d of course never use a card with a foreign transaction fee, let’s carry this to the end.

    Do you know how banks handle the “foreign” nature of this transaction–i.e., the transaction is still a “foreign transaction” even if it’s in dollars, so would the credit card still charge the ~ 3% fee *on top of* the merchant’s cut? A somewhat old example: http://consumerist.com/2009/06/07/beware-credit-cards-charging-foreign-transaction-fees-on-domestic-purchases/

  • glen

    Wow, this is GREAT information! Thanks TPG!

  • ex-IBMer

    This happened to me in Seoul, checked out of the Grand Hilton Seoul, got billed in USD at a not so great exchange rate. Then Amex adds the foreign transaction fee on top of that. Rip me off twice, thanks Hilton and Amex.

  • Chris

    When I checked out of the W in Santiago the woman at the desk said that it had to be ran in U.S. dollars to avoid their local tax. Not sure if there was any truth to what she said.

  • Fred

    this is not always true…
    When you travel abroad to a coutry like Brazil that have a very flexible exange rate, some times it is good to “lock” the exchange rate, otherwise you will have a surprise on your credit card balance when you come home.

  • http://lifelaidout.com/ Roger

    Does this apply to travel booked via Expedia or Priceline as well when they give you the option to buy now in US dollars vs. pay later in local currency?

  • michaeljapan

    @26dbd77bf06e3532a84725c58462bb0a:disqus Can’t speak for Chile, but this is certainly true for Argentina – they won’t add local tax if you choose to pay in USD: cash or credit, doesn’t matter.

  • DCdilemmas

    Thank you, TPG! I’m about to leave for Denmark and Sweden – this is definitely a useful read.

  • Someone

    DCC is only an option for Visa & MasterCard. It is not supported by Amex.

  • Ben

    Haha, thanks TPG! I have been asked on a few occasions if I want to pay in dollars or local currency, and I have also used the XE.com app to do the math very quickly. I have found it to always be cheaper when the charge is done in local currency. Because I tote the Chase Sapphire, I have no fear of Foreign Transaction Fees!

  • mmt

    Hertz at LHR. Told agent at rental I wanted to pay in pounds. When car returned the agent handed me a checkin receipt in dollars. I went inside to get the charge changed and was told that it is Hertz policy to always charge US credit cards in dollars. A request will not be accepted to charge in local currency.

  • mmt

    yes, if the charge location is outside USA it has the foreign transaction fee on top of the higher conversion rate.

  • jeremy

    Thanks for the section on PayPal. I’ve always know that they charge a higher rate when converting money. I tested this when I had to send money oversees using services such as Western Union. It bothers me to great lengths to see people choose PayPal or MoneyGram over Western Union because the initial “fee” is less, even though if you sit down with a calculator, the better rate you get through WU far outweighs the slightly less fee of using PayPal. You are right, PayPal is not your pal and their exchange rates / fees are opaque and are not in your favor

  • VM

    I was recently on a trip to India and had to deal with charges at restaurants in hotels and gas stations. I was charged in Indian rupees but when the charges showed up on my statement, they seemed to have been submitted in USD. I called Chase Sapphire and they told me that the charge was submitted in USD even though the receipt I had showed Indian rupees. Just wanted to give a headsup because its not as simple as just telling the vendor you want to be charged in Indian rupees…atleast not in India.

  • estoughton

    Yes. Most banks that charge a foreign transaction fee consider the transaction “foreign” if it is outside of the US (even if the transaction is in USD).

  • Elizabeth

    We recently returned from a 3 week road trip of France and the only place we were given that option was in Chamonix while getting tickets for the Aiguille du Midi cable car. The clerk didn’t ask, rather it was on the credit card machine and you chose which currency you wanted to pay in…..I’m glad I was aware of this and chose to be billed in Euros :)

  • ssgtravel

    In Hong Kong, most vendors offered a choice. I always picked Hong Kong dollars, but upon return home, found that several vendors billed me in US dollars. I had saved the signed receipts so had proof that I wanted to be billed in US dollars, and yes, being billed in US dollars was significantly more expensive. I ended up disputing some of the larger charges with my credit card provider and they adjusted the charges for me (thank you Chase Preferred Sapphire card), but it didn’t seem worth it to dispute the smaller chargers. So beware of this and save your receipts!

  • David

    That’s the case for Chile.

  • arnoldsemmons

    This is true in several countries in S. America, including Uruguay. I think it’s a way of encouraging foreign tourism, since they are only charging locals the VAT. But, I found that cheaper hotels didn’t participate for some reason.

  • arnoldsemmons

    I stayed at a Mingle hotel in Hong Konw, and the hotel’s credit card processing machine will convert the Hong Kong dollars to the currency of the country where your card is issued. This doesn’t sound all bad, but they are not using the exchange rate provided by your credit card company. They choose an exchange rate that favors the hotel, and you will end up paying more (interestingly, about enough to cover the fees they pay their bank for accepting credit cards). I spent at least half an hour talking to hotel employees about this, and they even got their bank on the phone to talk to me. I wanted to pay in Hong Kong dollars so that Visa would determine the exchange rate, and the solution the bank came up with is to use the old-fashioned credit card imprinter, rather than the electronic one. I don’t appreciate the way they are manipulating the exchange rate to charge more. Everywhere else in Hong Kong I used my Visa card, the sales slip always came up in HK Dollars. At this hotel, nobody knows the button to press on the machine to make that happen.

    I would urge anyone traveling overseas to always refuse having the sales slip prepared in their home currency, as every time this has been offered to me, it has always been in the merchant’s favor, sometimes by as much as US$20. Insist that you be charged in the local currency, and let Visa, MasterCard or American Express determine the exchange rate. This hotel even shows the exchange rate on the receipt, not as the very familiar 7.75 rate between the HK Dollar and the US Dollar, but as the inverse 0.132973. Presenting the exchange rate in this manner makes it impossible to quickly evaluate the exchange rate they are using.

  • dean

    I’m not sure Paypal is ever “your pal”. The ever increasing fees, the CONSTANTLY changing TOS, the VERY VERY roundabout way of using a non-branded paypal CC to pay for something, the only thing PP has going for itself is ubiquity (Which I hope AMZN payments stabs in the kidneys) and “ease” of use. PP went to hell shortly afer fleabay’s purchase of them.

  • Nick Ewen

    VERY interesting to know. If this happened to me, I would research the spot exchange rate on the date of my transaction (http://www.oanda.com/currency/converter/ is one site to do that), call Chase, and ask to be credited the difference. I know things can get dicey with purchase protection in other countries, but if you have a receipt in Indian rupees and the merchant converts it using DCC before running the charge, that is at best dishonest and at worst fraudulent. I would hope Chase could take care of that.

  • Nick Ewen

    Good to know! As I just posted in response to VM’s experiences in India, you can use http://www.oanda.com/currency/converter/ to look up past exchange rates on the date of your transaction, and for larger purchases, it’s probably worth disputing it!

  • Nick Ewen

    That’s a great question. I would bet (though I have not actually tried it myself) that the U.S. dollar amount would involve at least a little bit of DCC, though I’d also think that an international online travel agency wouldn’t have nearly the markup that a more local vendor would have. The only way I’d see a benefit to paying in dollars would be if the dollar appreciated against the local currency in the lead-up to your trip. In other words, if you lock in a $1 = 0.80 Euro exchange rate by paying in dollars in advance (even if you get hit with a slight fee from DCC), you could still come out ahead if the exchange rate later drops to $1 = 1 Euro.

    I’d love to hear if anyone has any experience with these online travel agencies!

  • Nick Ewen

    Are you talking about “locking” in the exchange rate in case it changes in the merchant’s favor between the transaction and when your card issuer processes the transaction? I’d say that a very volatile currency would be just as likely to depreciate as it would be to appreciate, and trying to predict those exchange rate movements becomes virtually impossible. I would also think that a merchant in a country with a constantly fluctuating exchange rate would build in an even higher fee for DCC to guard against their own exposure to the volatility.

  • joeypore

    Every time I’ve been abroad, I always makes charges in local currency (except when I didn’t know better a while back in Switzerland). However, I ran into a weird issue. I was recently with family in Curacao, Netherlands Antilles, and the predicament there is that they use the USD in circulation, as well as their own money. Also, every credit card machine I encountered was the same bank, and it always charged me in USD; there was never an option to select the other currency. I don’t think it was a big deal, though, as my Hilton bill was quoted in USD, booked in USD, and charged in USD, and nothing was ever inflated, at least or it never appeared that way.

  • Pingback: Travel Summary – 7/22/13()

  • B1BomberVB

    I learned to double-check hotels.com, which usually does not charge forex fees, but their US$ prices can be high if the dollar has gone up/ local currency down since their last update, which may be a week ago!
    Nick, you’ve got it backwards. In that case, one will LOSE money, having paid US$1.25 per Euro vs. $1 per Euro if he had waited.

  • B1BomberVB

    I’m so lucky to have a Chase Sapphire, Fairmont, & United Visas, which have no forex fee of Chase’s own (except Visa USA’s 1% or so.) But most credit cards incl Amex have a 2.5–3% fee of their own, so if yours does, it’s usually 6 of one, half-dozen of the other with DCC.
    The worst case is those cards which have switched from a Currency CONVERSION Fee to a Foreign TRANSACTION Fee, where your bank will charge you a fee even when shopping at foreign dollars-only shops such as in the Caribbean! With DCC, you pay DOUBLE fees.

  • Katherine

    DCC in Ireland is particularly bad. Every place charged in USD. We even had one restaurant that had machines programmed in USD only. The server and I tried several times to get it to charge in EUR, but no go. It wasn’t my credit card, (my sister’s) otherwise, I would have disputed it.

    Also, do not think that DCC does not exist in the US. I was at a car rental in DTW and they offered the Canadians next to me DCC. I complained to the manager and they had a huge explanation about how it benefits their Canadian customers.

  • TheInternationalLine

    Enjoy Madagascar! We were there last year (on United miles) and it was definitely one of our more memorable travel experiences. If you want any recommendations, please don’t hesitate to reach out.

    Regarding the rate conversion, we found that Hertz in Dublin charged us in dollars even though we asked them to charge us in Euros. On the plus side, we didn’t get charged a foreign transaction fee on our card, even though our card had one, so we saved a bit of money. Unfortunately, many CCs with rental car coverage in ireland still have FTFs, so this is one place where the DCC can actually be of benefit.

  • Nick Ewen

    Thanks B1Bomber, you’re absolutely right. I mistakenly reversed the numbers; my international finance professor would be horrified! I fixed the above comment.

  • Nick Ewen

    I hear what you say about cards with no foreign transaction fees; I love my Chase Sapphire and Hilton Visa. However, keep in mind that if anyone uses a Visa, MC, or Amex abroad with a 2.5-3% foreign transaction fee AND they ask to be charged in dollars, they will get hit with the 2.5-3% fee PLUS the DCC fee. Not a pleasant experience by any account…

  • Nick Ewen

    I don’t have any first-hand experience of this, but in countries that use the dollar as their currency, I would venture a guess that DCC isn’t an issue (since they are not ever doing any conversion for you and thus cannot add in a fee). However, keep in mind that charges in these countries would still be subject to a foreign transaction fee if you use a card that doesn’t waive those (like the Chase Sapphire Preferred), even if the purchase is made in dollars.

  • B1BomberVB

    “However, keep in mind. . . “?? What follows is exactly what I just wrote in my last paragraph!

  • http://lifelaidout.com/ Roger

    I decided to just book the trip in USD (which charges me now vs. later in local currency) because I’m in the midst of trying to reach the minimum spend for the Chase Ink Bold card and I’d rather get the 65,000 bonus points sooner. It didn’t seem like Expedia was building any spread into the USD price based on the conversion from USD to EUR (via Google).

  • GAM

    I wish there was a means of having the issuing bank of a credit card disable DCC at the acquiring level. For instance, when a foreign POS contacted your bank, the bank included some code that could prevent DCC from occurring.

  • Nick Ewen

    I was actually referring to your “6 of one, half-dozen of the other” comment, which I took to mean that the 2.5-3% foreign transaction fee OR the DCC fee would apply, when in most cases, it’s both. Sorry if I misunderstood what you were saying.

  • Nick Ewen

    Definitely nice to be able to compare the conversion rates to make sure you aren’t getting hit with DCC. For POS transactions, really the only way you will know is if you compare the spot exchange rate later, since the receipt will only show the exchange rate you were charged, not what the going market rate is.

    (And my wife is trying to hit the Chase Ink minimum spend too, so I know EXACTLY what you are talking about along those lines!)

  • B1BomberVB

    My “6 of one, half-dozen of the other” comment refers to cards with a Currency CONVERSION Fee!

  • Chanel @ La Viajera Morena

    That is quite interesting I had no idea and I have been seeing this as I have been traveling abroad. Thanks for sharing!

  • joeypore

    Yeah. I used the Chase Sapphire Preferred and AMEX Platinum, so no FTF. But based on the market exchange rate, I was getting cheated out of a few bucks every meal. A meal of $96 USD would actually be about $92 USD if using the market rate. Restaurants would usually print the bill in USD as well as Florin, but there was no way to pay in Florin unless you paid cash. There’s only one bank that does credit card processing in Curaçao, so they basically have control over exactly how they bill you.

  • chip griffin

    all this for a couple bucks, your GOD is a hard one to serve, always changing and all, he will take your life in a second if a couple of pounds short. i can’t believe someone wasted the time to write and research this crap! don’t worry guys your GOD is fixing to be put in your hand by the end of a needle, he will better rule your every second. some jerk from a computer on the other side of the world making your decisions. this is when the prison lets the prisoner rule. a world gone mad, that can’t be reasoned with. that is why it happened. obama pushed the button, a long ride from there. i wish it could have been different, a road block, then the needle. the army falls from the sky

  • Bre

    We saw this a lot in China at restaurants… they gave you the option at the bottom of the receipt to charge in USD, but there was a note about being charged an extra percentage to do so.

    Currently, we are in Thailand, and one local grocery store keeps charging me in USD even though they never ask me if I want to be charged in my own currency!! I tried to talk to the woman the last time I was there about it, but she didn’t understand. It’s frustrating, because the current transaction rate in Thailand is around 31 baht to 1 USD, but they were charging me at the rate of 29 baht to the dollar, so it ends up being quite a significant loss when you spend a lot of money at the grocery store!!

    The next time I go there, I’m going to try to ask them to charge me in the LOCAL CURRENCY… I mean, one of the main reasons I got my Chase Sapphire was so there were no foreign transaction fees!!… so there is NO reason for this damn supermarket to charge me in USD!

    Thanks for this post… it’s informative and interesting to know it’s going on all over the world, and to watch out for it!!

  • RW

    Do Mastercard or Visa have any contractual agreements to prohibit these DCC WITHOUT the customer’s consent?

    I’m currently dealing with this same problem with a travel agency in Spain, and the difference is about $645 from the official rate published by Mastercard for the date of the transaction. I’m not sure if I can put a http link in this message, so I will just say that if you go to mastercard.com/global/currencyconversion you can find the official Mastercard exchange rate for a particular date.

    There must be some contracted merchants agreement or even EU banking regulations to prohibit DCC without customer consent. Anyone know?

  • RaptorJesus

    This is kind of incorrect, or at least depends on the bank. I’m with Chase for example, and their exchange rate is always, always far worse than Paypal.

  • Miguel

    You must be working for a bank. Be more honest and tell the complete story. If you decline DCC and choose Not to pay in local currency you do not avoid fees for currency conversion, you are choosing your own bank charging you fees for currency conversion. There is always a fee on currency conversion, you only can choose who is going to charge you. At least with DCC at POS you can compare their fees with your bank fees but you will always pay fees where buying in different currency.

  • Miles

    If you have a foreign-transaction-free card you don’t need to pay any extra fees.

  • Swagato Barman Roy

    I booked an international flight from http://www.cheaptickets.sg/ using my Singapore visa card and the fare was printed on the ticket in SGD. When I saw the statement, the amount was around SGD 10 higher. I called my bank and they said that it was paid in GBP (god knows why) even though it shows up as SGD. Why would a Singapore based site charge a Singapore card in GBP? No answer. A little bit of online research and I got to know about this devil called dynamic conversion. So many ways to mislead people!

  • Swagato Barman Roy

    Miguel is right. Someone will do the conversion anyway and take his cut. What’s the conversion rate inforeign-transaction-free card? As shown on google?

    I have a Singapore visa card. Asked my bank about the charges if I use it for merchant transactions in Canada. The arithmetic made my head spin. There will be a fee by visa and a fee by bank. Not only that, they will convert my CAD spending to USD first, then USD to SGD. I believe this is intentional. Each time there is a conversion, it is another opening for someone to take another cut. If someone offers DCC, then maybe I can calculate upfront. In any case, if you want certainty, carry cash.

  • pafrco

    Please don’t be fooled by the merchants. They know exactly what they’re doing when they don’t give you a choice and charge you in your own currency. It’s to their advantage to do so as DCC is another income stream for them. If they charge you in your own currency without your consent ask them to reverse the transaction and make sure they give you the refund receipt. Then ask them to do the transaction again in the local currency.

  • Allie’s World

    Nonsense, at least for an American. Almost no American banks charge a currency conversion fee. Some charge a foreign transaction fee, which applies regardless of the transaction currency (thus, with DCC, you’re charged fees twice), and some don’t charge anything, but only a couple charge an exchange fee you can avoid with DCC.

  • Allie’s World

    MOST cards with a foreign fee charge a transaction fee, not a conversion fee.

  • Allie’s World

    Chase just uses Visa, there’s no way their exchange rate is EVER worse than PayPal. Make sure you have a Chase card with no additional fees such as the Sapphire Preferred.

  • RaptorJesus

    Yeah, I have no fees on my debit card, was lucky enough to get a plan with no fees as long as I use my card 6 times per month. And yes, Chase is often better than PayPal, at least with the US Australia.

    I’m from Australia and live in the US, and have sent and received money many times between both countries. Often Chase has the better exchange rate, by far.

    Although both are far, far below what the rate is actually stated as.

  • Allie’s World

    But your first message said that Chase’s rate was worse for you. The rate with Chase should be IDENTICAL to the Visa rate, which in my experience has under 0.5% spread (that is, it’s about 0.2% off going each direction from the spot rate). If you’re seeing a rate worse than that, your card isn’t as fee-free as you’d like to think.

  • Allie’s World

    In future, demand a Reason Code 76 (local currency not offered) chargeback for the full amount from your bank, then allow the merchant to re-charge you correctly in the local currency. Enough of these and merchants will change their shady ways.

  • Allie’s World

    That’s why you should insist on a chargeback reason code 76 and allowing the merchant to re-charge you. Enough dealing with these chargebacks and merchants will stop.

  • Allie’s World

    Unfortunately, you signed a contract giving up your right to be charged in the local currency AND their exchange rate is once of the worst. Even the big international car rental companies are super shady near-criminals to say the least. You need to read and amend the contract BEFORE you sign it.

  • RaptorJesus

    Chase is better than competing cards but worse than PayPal, in my experience.

    When the Australian dollar was above the US Dollar, Almost all banks, including Chase wanted to give me about 80c on the dollar. Only PayPal was giving me something above 90c.

Print This Page