Dynamic Currency Conversion: Just Say No

Using your credit card abroad can prove a costly affair.  If you don’t watch your card’s billing mindfully, you could be paying through the nose for charges and fees as a result of overseas use.

Dynamic Currency Conversion

Anytime a merchant asks you if you would like the charges to your credit card to be made “in your home currency,” they’re talking about a Dynamic Currency Conversion.  Instead of letting the credit card companies handle the conversion, the merchant does it on their end.

While it might sound like a smart idea (since you can see your charges on the currency your account is going to billed in), this offer is really nothing more than a scam.  The conversion rate the merchant uses on these types of purchases are so ridiculously skewed (read: higher than actual), you’re literally paying extra money for nothing.  Always say an emphatic “NO” when you’re asked.

Foreign Transaction Fees

While some merchants will try to convince you that charging in your native currency will remove the Foreign Transaction Fees usually levied by credit card companies, they’re really guessing at best.  Some credit card issuers won’t charge the fees, while others will continue to do so.  It all depends on your credit cards’ terms, not the word of some merchant who stands to eke out a little more profit from the deal if you agree.

Legality

As much as we would like to declare these types of setup as fraudulent, they’re actually legal, as long as you agree once you’re asked.  Always disagree to being charged with an automatic currency conversion - there’s absolutely zero benefits for you when you let them.