krazykanuck

Not sure if we have a thread about this, but thought I'd share.

When I landed in Milan a couple days ago I needed Euros to pay for the bus into the city, so I went and pulled 100 EUR from the Euronet branded ATM which advertised it was 0% commission and it gave me two options to "confirm the exchange rate" at what appeared to be a terrible rate, would have been $117 USD for 100 EUR, vs. the current spot rate is like $107 to 100. So I clicked the "do transaction without confirming rate" and it warned me that it didn't know what the rate would finalize as.

I figured I'd trust Mastercard and my bank to settle it at the current rate vs whatever the sketchy machine said and sure enough, it posted to my account as a $109 withdrawal (I don't have a 0% FX fee debit card, but it does waive the bank fee and refund the ATM operator fee).

I bet they make so much money off people who have no idea what the exchange rate actually is.

DavidVenuto

Some stores actually give you the option in paying in your local currency too, at an insanely bad rate. A no forex credit card has saved me hundreds of dollars per year.

sethweinstein

It is shady, indeed.

There's a whole thread on this: Dynamic Currency Conversion (DCC)

Except in extremely rare cases, it is always better to run transactions in local currency -- i.e., without "confirming the exchange rate" (never heard that language before, so thanks for that alert). This applies whether at an ATM or making a purchase at a merchant.

Ideally, use a card (a credit card for merchants, a debit card for ATM withdrawals) with no forex fees, but even if your card has forex fees it's still usually better to be charged in local currency. American Express cards are safe as they always process in local currency.

To be clear, "local currency" usually refers to the currency of the country where the purchase is being made. DavidVenuto used the term differently above, to refer to the currency of one's card's bank. Just clarifying!

Seth

pinniped

I always make sure to process everything in local currency, every time, no matter the card.

The scam is getting trickier with that language on the ATM.

And watch out for unscrupulous merchants who will try to run a DCC scam without your permission, acting like they're "doing you a favor" by pushing the button for you.

I guess I shouldn't be surprised that this scam is legal: countries don't have a very high incentive to protect tourists at the expense of their own local banks.

DornierDo28

Strange the other thread only appeared in 2014. This has been a well-known thing for at least four years...

What I find most infuriating is that US/CA ATMs charge fees for foreign cards with apparently no way around them?

oaken

Are you saying that in addition to an ATM fee there is also a fee for foreign cards charged by the ATM?

paperwastage

this, and MC generally has better rates than visa*

(you can compare yourself. *some ccys are better on visa, but a lot more are better on MC)

https://www.mastercard.us/en-us/cons...-currency.html
https://usa.visa.com/support/consume...lculator.html/

DornierDo28

No - there is an ATM fee that doesn't seem to be avoidable. This is unheard of in the rest of the world for banks' own ATMs. In the US, often convenience store ATMs are cheaper than multinational banks!

televisor

Exactly this.

Plus US shops try the DCC trick all the time, it's not just "the rest of the world".

ft101

Try Thailand - it's the same there.

WorldLux

The DCC trick is done all the time and not just abroad. Even Amazon is doing it.

deniah

Stay away from those Euronet machines. I look for prominent national/regional banks and use those machines

12939

A new trick I found recently was a Raphael's Bank ATM (airside arrivals at DUB) that only dispensed EUR. The machine showed the EUR to GBP conversion rate at a usurious rate, in a manner which suggested it was offering me a choice of conducting the transaction in either currency but no other option was offered. To add further insult it then forced me to press a button to confirm I had been offered the choice to pay in my home currency even though no such option had been presented.

pinniped

I don't know why I held this naive view: I would have previously thought Amazon was above using such a blatantly seedy scam.

Obviously holding U.S. based credit cards, I don't see DCC in the States. But since even domestic consumers have very little protection against unsavory banks, it doesn't surprise me a bit that international visitors are seen as potential prey to various scams. The financial sector purchases politicians in both parties, so this won't change no matter who's in charge in DC.

WorldLux

It's not really a scam. The rate, they propose, is just less attractive than the rate VISA/MC use. On my latest order, the difference between the visa exchange rate +1% fee charged by the bank and the exchange rate offered by Amazon.co.uk was somewhere around 0.50€ (less than 1.5% on the total of the order).

DCC is IMHO per se not a scam. They propose a service and hence should be allowed to charge an additional fee in the form of slightly higher exchange rates. It becomes a scam, when customers get forced to use it or if the rates are unjustifiably high (same goes for ATM charges). I've read reviews of several people notably criticizing such practices Poland.

Overall I do think that the system regarding DCC is relatively safe. It helps that most terminals switch to the language of the card (e.g. German in the case of most German credit cards).

I advise friends that don't travel as much to know the approximate exchange rate, download the VISA/MC apps that usually offer exchange rate calculators, to pay by principle in local currency (and only pay via DCC if the rate is very good) and pay cash or walk away if the vendor is refusing to charge the card in local currency.