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I fell for dynamic currency conversion — reader mistake story

Jan. 17, 2020
4 min read
I fell for dynamic currency conversion — reader mistake story
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Today, I want to share a story from TPG reader Sarthak, who was charged more than he expected for a recent hotel stay:

I spent five nights at the Westin Gurgaon in New Delhi for work in December. My total bill was 85,895 Indian rupees (around $1,206). At checkout, the front desk agent asked me what currency I wanted to pay in; I asked for U.S. dollars because I assumed that would make it easier to submit my expenses for reimbursement. Little did I know the hotel had its own currency exchange rate of 63 rupees to 1 dollar versus the market rate of around 70 — roughly a 10% difference.

I was charged $1,355 because I opted to pay in dollars, and I didn’t realize until I was submitting my expense report. I then looked back at another stay at the Shangri-La Hotel in New Delhi and noted the same discrepancy in exchange rates. I ultimately called Westin to resolve the issue; fortunately, they agreed to reverse the charges and rebill me in rupees.

Had I not noticed the exchange rate while submitting my expenses, I would have been out $150 without realizing. This would never have caught my attention on a personal trip (where I would not be seeking reimbursement). I now realize it is always better to opt for local currency when paying with a foreign credit card, especially those that have no foreign transaction fees.

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The payment option Sarthak encountered is a "service" known as dynamic currency conversion, and it's a scourge upon international travelers. The idea is that merchants give you the option to process a transaction in your home currency instead of the local currency, and then profit by offering a miserable exchange rate between the two. Unscrupulous establishments will try to sell you on the convenience of dynamic conversion or charge you in your home currency without asking — I've even encountered foreign merchants who seemed to genuinely believe they were doing me a favor by transacting in U.S. dollars. To avoid getting overcharged, make clear that you want to pay in the local currency, and check your receipts afterward to confirm.

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A common misconception about dynamic currency conversion is that you can circumvent foreign transaction fees by paying in your home currency. Unfortunately, that's not the case, as those fees are typically imposed according to your location rather than the currency you use. Paying in your home currency on a card that incurs foreign transaction fees is doubly disadvantageous: you get charged a higher price due to the poor conversion rate, and then pay fees based on that higher price. Do yourself a favor when you travel internationally: avoid dynamic currency conversion, and use a credit card with no foreign transaction fees.

Related: This sneaky debit fee could cost you on your next foreign transaction

I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing us to post it online), I’m sending Sarthak a gift card to enjoy on future travels, and I'd like to do the same for you. Please email your own travel mistake stories to, and put "Reader Mistake Story" in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. Due to the volume of submissions, we can't respond to each story individually, but we'll be in touch if yours is selected. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!

Featured image by (Photo by Christine Roy/Unsplash)