Credit card - Currency of foreign transaction.

When I recently paid a hotel bill in Switzerland, I agree the amount in Swiss Francs and presented my credit card.
I was given a keypad to enter my PIN number and this displayed an amount in
sterling, which I did comment on. My attention was then drawn to the credit card machine printout which showed the SFr amount. I later noticed that the print out also contained the words:
" 2% markup included in the exchange rate. I accept that I have been offered a choice of currencies for payment and that this choice is final. I accept the conversion rate and the final amount in transaction currency."
The later part was quite untrue as I was never offered a choice.
What I am wondering is how this transaction will be treated by my UK credit card operator, who would I think normally add a 2.75% foreign exchange commission!
I've not had a foreign credit card transaction converted to sterling in this way before.
--

Michael Chare



Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Wed, 8 Feb 2006 00:55:41 -0000, "Michael Chare"

This is known as Dynamic Currency Conversion (DCC).
http://www.corporate.visa.com/pd/consumer_ex_faq.jsp#faq5
You shouldn't have to pay any other charges to your credit card company as the amount presented to them will already be in Sterling. However, you should have been given the option to decline to pay in your home currency and instead pay in local currency if you prefer. I normally choose to do that as the credit card I use has no markup for foreign currency transactions.
Chris
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

card

way

Thanks for the useful link. I am not sure whether to be upset because I was not given the choice, or pleased because the commission was slightly less. My bet is that the hotel is getting a share of the commission which is why I was not given the choice!
My credit card troubles did not end there. When I got to Geneva Airport the BA check in person asked me to put my credit card in some machine. I had some E-Ticket issued as part of a package holiday and which I had not paid for with a credit card. So (as I had some time to waste anyway) I declined and was eventually checked in normally (with bags that had to go in the hold.)
--

Michael Chare




Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I believe VISA and Mastercard have already introduced "foreign usage" fees (charged where the cardholder makes a foreign purchase in *any* currency). Some US banks are passing this onto their customers with a nice little markup. I guess most UK banks will shortly. They realise that DCC is hitting their lucrative currency exchange earnings.

Exactly right. Most retailers won't ask you, as they should, they'll just convert the currency. I now always specify that I want to be charged in the local currency when handing my card over abroad. Watch out for it at ATMs too - at least with ATMs you will always get the choice presented to you.
--
Andy



Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
At 20:09:12 on 08/02/2006, Andy Pandy delighted uk.finance by announcing:

You can always refuse to sign (or enter your PIN).
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

was

why

too

Yes, once you know that this can happen you can take steps to avoid it. When I entered my PIN I was not aware that I would be charged in Sterling, granted the PIN terminal did show a Sterling amount, I just assumed that this was for my convenience to let me know roughly what I was paying in a currency I am familiar with.
--

Michael Chare



Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Michael Chare wrote:

If you were charged in pounds, you should not be charged by your credit card company, although I heard that some were planning to introduce a charge for all transactions abroad.
If your credit card company charges the standard 2.75%, you may be better off with DCC, but it all depends on the underlying exchange rates.
In the wonderful world of Chip & Pin, it is impossible to prove what you did or did not sign. I would file a complaint as a matter of priciple.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
s snipped-for-privacy@yahoo.com wrote:

I noticed that Boots at least have changed their POS terms and conditions to include the "if you sign or use your PIN you accept we will make a handling charge of 2.5% to avoid tax etc.".
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Colin Forrester wrote:

There is a little sticker with tiny text on the PIN pads in the shops that use this trick, but it is barely legible and sometimes half torn off already. I think it is very dodgy, the shop assistants should be required to draw the customers' attention to it. How would you feel if a notice in a similarly tiny font somewhere else in the shop declared that by entering you PIN you agree to to give your first born child to the shop?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

This is exactly what the appeal court said when they rulled the practice ineffective. The appealant (Debenhams PLC) appealed to the Lords, who refused to hear the case.
This should have been the end of this scam, but as noted by the earlier poster the practice still continues.
It is unclear why.
I recently made a purchase in a shop with one of these notices and the receipt that they gave me had no mention of this deduction and had a VAT number so in theory VAT applied on the whole amount.

Not quite the same thing is it?
tim
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 11 Feb 2006 01:38:28 -0800, s snipped-for-privacy@yahoo.com wrote:

I'd say "Take him" though I'd prefer it if they took the 2nd born. They'd be sorry, he's 30, still at home and expensive as hell to feed.
DG
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

BeanSmart.com is a site by and for consumers of financial services and advice. We are not affiliated with any of the banks, financial services or software manufacturers discussed here. All logos and trade names are the property of their respective owners.

Tax and financial advice you come across on this site is freely given by your peers and professionals on their own time and out of the kindness of their hearts. We can guarantee neither accuracy of such advice nor its applicability for your situation. Simply put, you are fully responsible for the results of using information from this site in real life situations.