When a card terminal, ATM, or foreign website offers to charge you in U.S. dollars, decline and pay in the local currency. Saying yes lets the merchant or ATM operator set the exchange rate, and its markup routinely adds several percent to what your own card would charge.
The dollar option feels like the safe pick because it puts your total in a currency you know. It arrives as a clerk’s question at the register, a terminal screen listing the amount in both currencies, or an ATM offering to convert your withdrawal.
That comfort is what you’re paying for. The merchant typically earns a commission on every sale it converts, which is why the question gets asked at all.
Germany’s consumer group Stiftung Warentest sent 20 investigators to 13 non-euro countries for a 2016 report, and every conversion they accepted raised the price. Store payments cost 2% to 5% extra, and the worst cases ran 12%. At the store rates, a $300 hotel bill grows by $6 to $15, and all you get for it is a receipt in dollars.
If a receipt already shows two currencies, ask the clerk to void the charge and run it again in the local one. At an ATM, pick the option without conversion, even if the screen warns about exchange rates. Visa says declining won’t stop the purchase or the withdrawal.
Foreign websites make the same offer at checkout, sometimes with dollars already selected. Mastercard’s rules require a way to switch back to the local currency, so find it before you pay.
Your card can add a second cost. Many credit cards tack on a foreign transaction fee, usually 1% to 3% of each purchase processed abroad, and paying in dollars doesn’t necessarily avoid it. Travel with a card that charges none.
Whoever does the converting sets the rate, so check who did. Once you’re home, run each foreign charge through your card network’s free online converter. Visa’s and Mastercard’s both take the purchase date and your card’s fee. A charge well above the result most likely went through the merchant’s conversion, and if no one asked you first, dispute it with your card issuer.
Editorial & Advertiser Disclosure: The editorial content on this page is not provided, commissioned, reviewed, approved, or otherwise endorsed by any advertiser. Opinions expressed here are ours alone, not those of any advertiser. The offers that appear on this site are from companies that compensate us. That compensation may influence which products we cover and where and how they appear on a page – including the order in which they appear – but it does not influence our evaluations, ratings, or opinions. We do not include every company or offer available in the marketplace.
Related:
