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Traveling and using credit cards abroad
OK, so usually when I travel I tend to use cash outside of USA. But that was before I discovered this blog and all the possibilities of using points.
So for my next trip, I got myself some solid credit cards with no foreign transactions fees, and decided to use plastic abroad.
So I used my chase sapphire a few times, but then on the store receipt I discovered that store charges their own FX fee! I did some shopping at Carrefour (it’s a european supermarket chain), and on the receipt it says that the transaction was processed by US Bank and I was charged 3% FX fee. I’m glad that I had a no foreign transaction card, because then my bank would charge me another 3% on top of that, for a total of 6%…
I made some more purchases, and it seems that sometimes I got charged by the retailer’s bank, and sometimes I wasn’t charged. I’m not exactly sure what determines this. But if I get charged 3% FX fee, this completely elimates any benefit of using the card outside US, cash is cheaper.
So I was wondering what do you usually do when shopping at local stores in foreign countries? Cash or credit?
[USER=835]@Adam123[/USER] I almost always use a no FX fee card. Do you remember if the charges where the fee showed up were charged in USD as opposed to the local currency?
[QUOTE=”Gaurav, post: 9725, member: 79″][USER=835]@Adam123[/USER] I almost always use a no FX fee card. Do you remember if the charges where the fee showed up were charged in USD as opposed to the local currency?[/QUOTE]
Yes, that seems to be it. Charges with a fee were in USD. I read some more about it… Seems this scheme is called DCC, I found some articles about it, and it appears that many people got surprised by additional fees on their “no foreign transaction fee” credit card.
The problem is that many of the times the merchant doesn’t ask you whether you want to be charged in USD. I remember I was asked only once… And that one time it was at an airport shop.
it would be nice if there was a way to disable DCC at the credit card, but so far I found no way to do it 🙁
Yeah, that’s a sneaky way to gouge fees. Next time don’t sign off on the purchase unless it’s in the local currency.
Yes, now I understand that I definitely gotta watch out for DCC. The problem is that apparently many places use DCC automatically… For example, in that flyertalk link, numerous people said that in China DCC is triggered automatically, and it’s very problematic to force the cashier to charge you in local currency.
I would assume that at the airports or good hotels it should be easy to avoid DCC. Trouble starts when you go to more local places, where merchants aren’t used to as many foreigners and people don’t speak English, so it becomes a huge hassle to get the situation resolved. It appears that I need to explain the salesperson/cashier that I don’t want DCC, which makes it difficult as the salesperson might not understand what DCC means as majority of people use Euro credit cards, so they rarely even encounter DCC. To top it off I don’t speak the local language, and the salesperson speaks very limited English…. This makes it seems like it’s better to just pay cash.
This DCC thing is a very unwelcome option, makes it just more difficult to pay…
So I ask how do you usually approach a situation like this? Do you have to tell the cashier/salesperson/waiter about DCC every single time you use your credit card abroad?
Has anyone been able to call the bank and ask to disable DCC option? Or is that not possible?
I don’t know of any way to disable it from your bank and I’m not even sure if it originates there or from the company that processes the transaction in your country of travel.
Personally I wouldn’t get into DCC, just say charge me in Euros or Yuan or whatever the local currency is if they presented a bill in USD. If I know this is problematic in certain places I would be proactive about making sure this is clear before entering into a transaction and either take my business elsewhere or have a stash of cash available if I must conduct the transaction.
Gotcha, thank you for your input 🙂
If you are concerned about language, have your host or hotel write out a simple message on a piece “Please charge in *local currency*”. Then carry it around or take a picture with your phone and show that to vendors.