uclacolumbiaunc

I have a few choices, USD, EUR or CZK, to be paid with US AmEx card.

which currency is better, usually?

Ditto

I would say either EUR or USD, check what is the currency conversion fee your CC company will charge you from EUR and then decide whether it is better to let AF/KL do the conversation for you or let your CC do it.

chil

obviously, USD unless you want to lose ~2.7% on currency conversion factor (+ potential foreign transaction fee which is common for US credit cards)

Ditto

You are assuming here that the airline conversion rate will be the same as the CC one, which is not always the case.

In the world of DCC, often it is cheaper to let the CC company handle the currency conversion.

ajeleonard

The underlying fare is usually going to be denominated in the currency of the country of departure. If you choose to select a different one then they're just going to convert it themselves at some rate which may not reflect the actual interbank rate. Even if you put it into the currency of your credit card you may still be hit by foreign transaction charges.

Personally I would just pay in the fare's currency and let my credit card convert

ajeleonard

The underlying fare is usually going to be denominated in the currency of the country of departure. If you choose to select a different one then they're just going to convert it themselves at some rate which may not reflect the actual interbank rate. Even if you put it into the currency of your credit card you may still be hit by foreign transaction charges.

Personally I would just pay in the fare's currency and let my credit card convert

Enthilza

That's my experience as well.

The conversion rates of airlines, supermarkets or ATMs are often MUCH higher than what my bank charges me so unless you have the proof that this is not the case for you, I would say go with your local (or origin) currency.

ranskis

Fares are usually published in the currency of country of departure of the fare component. They are then converted into NUC using the ROE (Rate of Exchange). As a rule of thumb, 1 NUC = 1 USD. The total of the NUC (that can include stopover charges, differentials, HIP, that are also converted to NUC) is then converted to the currency of the country of departure of the ticket using the ROE. This fare amount is then converted to the currency of the country of ticket issuance using the bankers sellers rate (very close to average spot rate of the previous day usually).

So the difference between tickets issued in US or Europe in EUR is very small and it can be + or -, depends on how the forex markets evolves. So as a general rule, book on a site that is located in a country that uses the currency of your credit card to avoid CC transaction fees or mark-up.

Now some things to be aware of:
- different markets (and point of sales) may have different service fee structure. If you buy on expedia.de you might have 10 EUR service fee whereas expedia.com (US) charges 7 USD as an example whereas expedia.es might have 0 fee.
- availability can vary based on the point of sale (booking class K available when buying in Germany but not when buying in US or vice versa, happens a lot with AF)
- some fares can only be sold in some specific countries or via specific agents, so the price difference between 2 countries is not due to exchange rate difference but different fares can be priced in different countries.
- ticket issue date is based on the point of sale. So if you have an AF promo where the ticket must be issued by 12MAY, even if it is already 13MAY 3:00 am in Europe, you can still buy it on US websites, in USD. So even with a EUR CC and 1-3% transaction fee, it might be well worth it.

NickB

This is misleading. Airlines do not convert fares arbitrarily building in an additional fee in the conversion rate. Rather the airline industry uses a notional currency known as NUC (an acronym for "neutral unit of currency") for conversion purposes as explained in ranskis's post.

In case of wild currency fluctuations or deliberate sudden devaluations, it can happen that a fare turns out to be very significantly better or worse in a given currency rather than another. However, this is the exception rather than the rule. Normally, fares are converted without major variations and certainly without the kind of loading you get with DCC or even with ordinary credit card loading. It is therefore normally better to pay in the currency which your credit card uses so as to avoid exchange rate fees.

Ditto

I think a few PAX will disagree with you on that.
https://www.flyertalk.com/forum/othe...?highlight=DCC
https://www.flyertalk.com/forum/othe...?highlight=DCC

Now, I have checked a random AMS-JFK flight in KLM website, the EUR price is 771, the USD price is 863.
According to xe.com 771€ is 838$, add even 2.7% CC charges on that and you are still better off paying in EUR than in USD.

chil

sorry -- i thought you were talking about stable currencies i don't think it's worth the trouble because it will be at most 1-2% of the ticket price here.

if you want to play the game though, then you should know that the airline exchange rate is updated weekly on wednesdays at midnight (if i'm not wrong) while CC companies update it almost daily. and it is usually the official government rate in a given country + a couple of % -- i don't remember the exact figure. anyway, when the russian ruble took a dive at the end of 2014 and was losing 15-20% on mondays/tuesdays against USD then gaining back 5-7% by the end of the week, i was able to buy a couple of expensive business class tickets on AF and DL using russian travel agencies and paying with an american credit card in USD and saved about 12% on each ticket. those purchases were done on tuesdays.

it was possible to play a similar game when GBP lost 15% over a few days last year

there is a catch, however. under unstable markets, in some countries like russia sneaky CC companies (in fact, those are banks) might wait a few days before posting your transaction in order to try to rip you off on the currency exchange because the CC exchange rate is applied at the time when a transaction is posted.

NickB

We were talking about IATA airlines using the IATA exchange system to price flights. Low cost airlines, like Ryanair, do not do this and charge flights in the original currency only.
Lest you should think that I am totally unaware of DCC practices of Ryanair, you may want to check who was the OP in the second thread you referenced....

Well, you are very good, much better than me because I cannot get the KL US website to price in USD a flight departing from AMS. What I get when I try to do this is prices in EUR preceded by the following message:
In other words, the KL website will charge by reference to the country of departure. An increasing number of airlines do this (BA, LH) although I was unaware that KL did this. If KL online charges in the currency of teh country of departure in any event, then it will make no difference which country you use (except for potential variation in local booking fees).

If you use a website that charges in local currency using the IATA conversion mechanism, like af.com, I am getting a return AMS-JFK sold for EUR758.39 on the AF NL site and sold for USD816.19 on the AF USA site, so slightly better on the USA site but within the margin (1%) of fluctuation between USD and EUR in a week (since NUC rates are set weekly, IIRC).

Ditto

Oops
My point is, always compare and do not assume that having a website charging you in your local currency is better than having the website charge in the website local currency and have your CC handle the currency conversion fees.

You can get KLM website to change the currency if you go all the way to the payment page, then you can choose a currency of your liking, irrespective of the currency the ticket was originally quoted in, and this conversion seems to have nothing to do with IATA conversion rates, but purely with whatever rates KLM website determined are appropriate.

ranskis

NUC here have no impact: the fare in EUR is converted to NUC using the ROE and back to the fare in country of departure (EUR) using the same ROE. So even if the ROE was off by a big margin compared to actual exchange rates EUR/USD it would have no impact here.

Then regarding the large difference between US and NL point of sale, make sure the fare basis are the same. I can find randomly AMS JFK on 7-21JUN that is available in N both ways when booking on klm.nl and only N outbound Q inbound on airfrance.us. This explains the price difference, that is due to availability difference based on the points of sale.

Finally, the 758.39 EUR vs 816.19 USD is due to local market conditions by regard to service fees: 10 EUR on klm.nl and 0 USD on airfrance.us. Go to airfrance.es and get it in EUR without service fee.

Note that the fares converted in currency of country of purchase are rounded to the nearest integer in case of EUR, USD and GBP points of sale at least. Taxes are rounded with 2 decimals. When added up, this can make quite a few cents difference, in one direction or the other.

When I look at the AMS JFK on airfrance.us and airfrance.es, no service fee, same fare basis, I get 822.19 USD (453 USD fare + taxes) and 753.39 EUR (415 EUR fare + taxes). On Oanda, the exchange rate EUR/USD was 1.09101 yesterday which should be more or less the rate used for today's airline transactions, so 452.769 USD, rounded to 453 USD fare. Since the EUR right now trades a bit stronger (1.094 USD), buying a ticket in USD (point of sale USA) now saves a bit of money since the exchange rates used today by airlines are those from yesterday in the market, so in this situation it gives a 0.27% advantage. And if you have a EUR credit card, then the slight benefit of buying in USD today is pretty much offset by the card currency conversion fees or mark-up.

NickB

This is different indeed. The fare is quoted in EUR. It is only for the payment that you can choose the currency whereas the IATA/NUC process is used to quote the fare in local currency. The initial statement makes it clear that the fare will be quoted in EUR regardless of which website you use even though you can pay in various currencies.

It is certainly the case that, when you are offered the option to pay in multiple currencies for a fare quoted in a given currency, it is almost invariably better to pay in the original currency to avoid DCC-type loading.

However, we are talking about something else when the option exists of getting the fare calculated in local currency, it is normally better to choose that subject to any additional fees that may be charged by the platform (whether the airline's website or the OTA, etc...) and other factors mentioned by ranskis such as differential inventory availability, etc...