Originally Posted by
Kremmen
There are still financial institutions in some countries which only apply FTFs to transactions in foreign currencies. If your DCC surcharge is 3% and your own bank's surcharge is 3% and they don't add theirs in the case of DCC, it's a close call.
This is becoming more and more rare, not only as financial institutions add FTFs to home-currency transactions, but as DCCers regularly bump up their fees to 5% these days.
In fact, if both are 3% you might be inclined to accept DCC since the total transaction amount would look like a purchase, inclusive of DCC. In the case of a currency conversion, the bank would only apply rewards earned to the base purchase amount. The currency exchange fee would be separate. If for instance you spend $1000 on a hotel overseas, that would be an additional $30 worth of rewards eligible spending if you accept DCC.
I think part of the reason why banks switched from currency exchange fees to foreign transaction fees was because of DCC. In the US, I think cards have switched over primarily to FTFs, so if you used a 3% FTF card and accepted DCC you would be looking at a transaction cost 5-8% higher than if you had used a 0% FTF card and avoided DCC.