This burgeoning phenomenon is known as "dynamic currency conversion," or DCC. It turns out that some companies with a large volume of tourist business, such as Avis and Europcar, started the practice in select countries several years ago.

The service is offered to merchants by technology providers through the merchants' banks. It happens at the point of sale, so neither credit card companies nor the banks that issue your cards have anything to do with it.

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[ B]ased on our experience, it is clearly not always a better deal than asking that the transaction be run in local currency and allowing our credit card company to handle the conversion to dollars.

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So let's say you wander into a European shop that uses Planet Payment's DCC system and buy an irresistible trinket with your MBNA Visa card. Unless you request that the charge be processed in euros, you'll likely pay an extra 3 percent for the dynamic currency conversion. Then, MBNA will tack on another 3 percent for itself. That's a total of 6 percent on top of the price of your bauble. Consider what you spend on an entire trip -- at hotels, restaurants and rental car companies -- and it could be a hefty penalty.

In the same scenario, if you asked for charges to be run in local currency, typically the most you'd pay is the extra 3 percent charged by MBNA.

But wait! Just when you were ready to lie on the beach and sip a silly cocktail charged in local currency, there's another posibility. Bank of America currently imposes a 3 percent fee for transactions in foreign currency, but doesn't charge a fee for DCC transactions converted to dollars, according to spokeswoman Betty Riess. Chase does the same, spokeswoman Jessica Iben said. So with these cards, you'll pay about 3 percent more, no matter which currency you choose.

In our case, though, we did even better -- no fees on any foreign charges whatsoever, using a Capital One Visa. According to spokeswoman Diana Don, Capital One absorbs Visa's fee and adds no additional fees on foreign charges, whether they are made in dollars or the local currency. That's why we did so much better at our Irish hotel by paying in local currency.

(Other banks that have no fees attached to foreign transactions, according to Consumer Action, an advocacy group, are Amalgamated Bank, BMW Bank and Thompkins Trust Co.)

Bottom line: While MBNA cardholders could end up paying 6 percent extra by using DCC, and Chase or Bank of America customers will likely fork over 3 percent no matter which currency they choose, if you carry a no-fee card and pay in local currency, you'll come out the winner, with nothing extra added to your bill.

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The Starwood hotel chain is in the process of rolling out DCC for all its Asia-Pacific properties, using Planet Payment's system,according to Corporate Communications Manager Hwee Peng Yeo.

Yeo said in an e-mail that the company is "fully committed to the disclosure and consent requirements of Visa and MasterCard regulations." She outlined a procedure whereby customers will be asked at check-in whether they would like to pay in their home currency, based on the exchange rate in effect on their checkout date. Cardholders will then be requested to acknowledge their choice on the registration card, she noted. At checkout, she said, customers will be presented with both the local-currency price and their home-currency price and can opt out of the conversion.