Credit cards - US dollars vs Euros

[jmpiterniak]

Going to Europe on a cruise, and we were told by Citibank that when we use our credit cards in port, there will be a charge if we buy things in Euros and have to have the credit card convert/do and exchange to US dollars when billing. Is anyone familiar with this?

 

Thanks in advance!

 

JoAnne

[John Bull]

Hi JoAnne,

 

That's perfectly normal with most cards,

But  you can get cards  with no foreign transaction fees.

Different cards, different  perks. Some give cashback, others give air-miles or lower interest rates or higher credit limits - or no-fee foreign transactions.

We have a card with no foreign transaction fees that we use just for travel.

There are several such cards in the US - I believe Capital One, and your countrymen can suggest others.

Perhaps worthwhile for this cruise (certainly worthwhile for your on-board account alone if it's not a US ship), definitely worthwhile if you expect to travel more.

 

The currency exchange rates that all credit card issuers give is at or marginally above the wholesale rate, significantly better than exchanging cash at a bank or exchange bureau - so using a credit card rather than cash is better value even with a fee, except for small purchases if the card has a minimum fee.

So you should ask what the fees are, and decide for yourself whether a no-exchange-fee card is worthwhile.

 

BTW, it's becoming common practice  for outlets to offer to charge your card in your own currency "for your convenience" 

They might ask, or their POS machine may ask you to choose the currency, or they might even cheekily just present the card-reader already converted to dollars.

DECLINE any offer or attempt to convert from local currency to your card's currency, because they set their own exchange rate & I guarantee that rate will be in their favour, not yours. Always but always have your card charged in local currency, and leave your card issuer to do the conversion. 

This includes your on-board account if ship's currency isn't USD. (US ships' currency is USD, so no problem)

 

JB 

[RJ2002]

36 minutes ago, jmpiterniak said:

Going to Europe on a cruise, and we were told by Citibank that when we use our credit cards in port, there will be a charge if we buy things in Euros and have to have the credit card convert/do and exchange to US dollars when billing. Is anyone familiar with this?

 

Thanks in advance!

 

JoAnne

 

When using a credit card overseas, sometimes there will be an option to have your purchased charged in the local currency, or converted to USD.   There is often a hefty fee (2-3%) to convert the foreign currency to USD, so many people opt to have the charge done in the local currency.  Then, your credit card company will convert it to USD when billed on your statement.  Some cards charge a fee for this, and others do not.  It sounds like you have a card with a foreign currency conversion fee.

[Flatbush Flyer]

1 hour ago, jmpiterniak said:

Going to Europe on a cruise, and we were told by Citibank that when we use our credit cards in port, there will be a charge if we buy things in Euros and have to have the credit card convert/do and exchange to US dollars when billing. Is anyone familiar with this?

 

Thanks in advance!

 

JoAnne

Get a travel savvy cc with no foreign transaction fees (e.g., United Explorer visa, Chase Sapphire visa, etc) and always have charges made with local currency (for the reasons pointed out above).

[clo]

8 minutes ago, Flatbush Flyer said:

Get a travel savvy cc with no foreign transaction fees (e.g., United Explorer visa, Chase Sapphire visa, etc) and always have charges made with local currency (for the reasons pointed out above).

Absolutely.  I can't remember how long it's been since we've been charged 'foreign transaction fees.'  To OP get another bank.  We get travel points (or other options) and all manner of other benefits.

[CPT Trips]

Capital One offers no annual fee cards with no foreign transaction fees. We also have a Costco Visa that has the same benefits. 

Discover also offers no annual, no foreign transaction fee cards BUT not many places outside the US accept Discover cards.

[SRF]

6 hours ago, John Bull said:

BTW, it's becoming common practice  for outlets to offer to charge your card in your own currency "for your convenience" 

They might ask, or their POS machine may ask you to choose the currency, or they might even cheekily just present the card-reader already converted to dollars.

DECLINE any offer or attempt to convert from local currency to your card's currency, because they set their own exchange rate & I guarantee that rate will be in their favour, not yours. Always but always have your card charged in local currency, and leave your card issuer to do the conversion. 

This includes your on-board account if ship's currency isn't USD. (US ships' currency is USD, so no problem)

 

JB 

 

Some ATMs are also doing this now.  

 

With some, you can decline the conversion, and they will charge in the currency you are receiving. Some will ONLY do the conversion.

 

Be careful and be thinking.

 

 

[SRF]

6 hours ago, RJ2002 said:

 

When using a credit card overseas, sometimes there will be an option to have your purchased charged in the local currency, or converted to USD.   There is often a hefty fee (2-3%) to convert the foreign currency to USD, so many people opt to have the charge done in the local currency.  Then, your credit card company will convert it to USD when billed on your statement.  Some cards charge a fee for this, and others do not.  It sounds like you have a card with a foreign currency conversion fee.

 

Worse that the fee is the lousy exchange rate that they use.

[Lois R]

I agree with the Capital One suggestion. Been using it for years. No foreign transaction fees.

[Nic6318]

20 hours ago, jmpiterniak said:

Going to Europe on a cruise, and we were told by Citibank that when we use our credit cards in port, there will be a charge if we buy things in Euros and have to have the credit card convert/do and exchange to US dollars when billing. Is anyone familiar with this?

 

Thanks in advance!

 

JoAnne

 

Hi

 

You can get another credit card if you wish, but if you are not travelling a lot out of the country, it becomes a question of whether it's worth the effort. Just to save 2% of what, how much are you going to spend? If it's just a cruise with ordinary port purchases you might save $10-20. If it's only a one time thing, you can decide for yourself if it is worth it.

 

have a great trip

[Underwatr]

21 hours ago, RJ2002 said:

There is often a hefty fee (2-3%) to convert the foreign currency to USD, so many people opt to have the charge done in the local currency. 

When I've done the math the merchant's "convenient" rate has been closer to 10-15%. 

 

Always always always run the charge in the local currency and let your bank convert, even if your bank will charge a (much smaller) fee for the non-local transaction.

 

And note that many issuing banks will charge a foreign transaction fee any time the charge runs through a foreign bank, whether the slip you signed was in your home currency or the local currency. 

[MicCanberra]

Get a credit card or even a debit card that attracts no international transaction fees.

[clo]

24 minutes ago, MicCanberra said:

Get a credit card or even a debit card that attracts no international transaction fees.

Absolutely.  We have a checking account with USAA that we only use for debits as it rebates us $15/mo for that.

[Underwatr]

1 hour ago, MicCanberra said:

Get a credit card or even a debit card that attracts no international transaction fees.

You still need to be aware of dynamic currency conversion.

[CPT Trips]

On September 21, 2019 at 8:54 PM, clo said:

Absolutely.  I can't remember how long it's been since we've been charged 'foreign transaction fees.'  To OP get another bank.  We get travel points (or other options) and all manner of other benefits.

 

2 hours ago, clo said:

Absolutely.  We have a checking account with USAA that we only use for debits as it rebates us $15/mo for that.

 

Do you realize that USAA now charges foreign withdrawal fees for ATMs?

[clo]

5 minutes ago, CPT Trips said:

 

 

Do you realize that USAA now charges foreign withdrawal fees for ATMs?

Thanks A LOT.  We'll look into that.

 

Oh, wait, does that mean they no longer rebate the ATM fees?

[iancal]

Many credit cards add a service fee of 2.5-3 percent on each foreign transaction,

 

We use a credit card for out of country purchases that does not do this.  Foreign transactions come across at the fx rate.

 

Even then you do need to be careful.  We have been traveling in Greece for the past several weeks.  For the first time we notice that some credit card transactions give us a choice of being billed in our home currency or in Euros.  We always select Euros.  If not, the local bank that processes the merchant transaction will add this fee to the conversion. 

[MicCanberra]

8 minutes ago, iancal said:

Many credit cards add a service fee of 2.5-3 percent on each foreign transaction,

 

We use a credit card for out of country purchases that does not do this.  Foreign transactions come across at the fx rate.

 

Even then you do need to be careful.  We have been traveling in Greece for the past several weeks.  For the first time we notice that some credit card transactions give us a choice of being billed in our home currency or in Euros.  We always select Euros.  If not, the local bank that processes the merchant transaction will add this fee to the conversion. 

Yep, always get your own bank to do the conversions.

[iancal]

Some of the larger merchants in Florida have been doing this for years.  Our first exposure was a large store that added four percent to the then current exchange rate...then sent the transaction off to their bank.  It is a rip off.   We had had numerous trips to Greece.  This is the first time that we have been given a choice prior to tapping or inputting our pin.  Before doing so it comes up with two options.  Option one is your home currency.  Option two is Euros.  It almost looks like it is there for information purposes.  You have to select option 2, then tap or pin.  If you do not, you will be billed in your home currency.

[RJ2002]

18 hours ago, Underwatr said:

When I've done the math the merchant's "convenient" rate has been closer to 10-15%. 

 

Always always always run the charge in the local currency and let your bank convert, even if your bank will charge a (much smaller) fee for the non-local transaction.

 

And note that many issuing banks will charge a foreign transaction fee any time the charge runs through a foreign bank, whether the slip you signed was in your home currency or the local currency. 

 

Wow, 10-15% is indeed a hefty foreign conversion fee.  Thankfully the worst I've seen recently was the ~3% that we incurred at a shop near Luxor.   Like you, I always ask to have the charge put through in local currency, and I did so at the transaction in Luxor.  Unfortunately, I didn't realize until later that it had been actually been put through in USD.  The sales slip was confusing and had both currencies listed.  Lesson learned...  don't get too caught up in the moment, and take time to carefully review credit card receipts - especially when traveling.

[MicCanberra]

Being aware of possible robbery or a rip off is applicable in the shops as well.

[clo]

1 hour ago, MicCanberra said:

Being aware of possible robbery or a rip off is applicable in the shops as well.

How so?

[MicCanberra]

Because if you are unaware of what a merchant is charging, you will be ripped off.

[SRF]

On 9/22/2019 at 7:14 PM, clo said:

Absolutely.  We have a checking account with USAA that we only use for debits as it rebates us $15/mo for that.

 

Except at least one of their credit cards has foreign transaction fees for purchases.

[SRF]

22 hours ago, RJ2002 said:

 

Wow, 10-15% is indeed a hefty foreign conversion fee.  Thankfully the worst I've seen recently was the ~3% that we incurred at a shop near Luxor.   Like you, I always ask to have the charge put through in local currency, and I did so at the transaction in Luxor.  Unfortunately, I didn't realize until later that it had been actually been put through in USD.  The sales slip was confusing and had both currencies listed.  Lesson learned...  don't get too caught up in the moment, and take time to carefully review credit card receipts - especially when traveling.

 

This is not a conversion fee, that is an exchange rate, plus fee.

 

So if the actual bank rate is 10 to 1.  The merchant may do the conversion at 9 to 1, then add a 3% fee for doing the conversion.

 

So you buy something for 100 whatevers.  If you charge in local currency, you bank exchanges at 10 to 1, so it costs $10.  Merchant does the conversion, and charges your card 100/9 = 11.11, pllus 3% (another .33), for a total of $11..44.  A 14.4% increase in the price.