Using foreign visa card. What currency to pay with?

[BKKBobby]

Hi. Every time they ask me if i want to pay in my own currency or with baht when paying with my foreign visa card i choose baht. I dont know if it has any relevance but my own currency that my foreign bank uses is strong and has gained a lot against the baht during this year. I have a hard time calculating which option is best when a queue of people stand behind me. And i know different stores have different exchange rates depending on which bank they use. Anyone who knows which option usually is best?

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Edited November 29, 2013 by BKKBobby

[Prbkk]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

[Bender]

as said above, always choose baht,

any others currency is just a rip off

[BKKBobby]

Thanks for the answers.

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[Louisblackbird]

Baht

[howrub]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

Agreed. And if your bank takes a surcharge for "foreign transactions" using your own currency will not get you out of it. It is usually applied EVEN if there is no exchange involved, just due to the transaction being outside of your own country. Biggest rip-off they have ever devised.

[evadgib]

A routine return flight from Samui to Bkk added an extra GBP15 to an already overpriced service a couple of years ago when I failed to notice the switch as per post #2.

HTH

Edited November 30, 2013 by evadgib

[nycjoe]

don't use the atm bring your passport into the bank with your visa/mastercard debit. no atm fee much better rate.

[Suradit69]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

Agreed. And if your bank takes a surcharge for "foreign transactions" using your own currency will not get you out of it. It is usually applied EVEN if there is no exchange involved, just due to the transaction being outside of your own country. Biggest rip-off they have ever devised.

For awhile when I bought things on eBay using my US-based PayPal, the credit card would be billed in dollars no matter which country/currency was actually paid out. Then they seemed to have caught onto that and you'd get screwed first by PayPal and then hit with a foreign transaction fee by the credit card company ... of course PayPal encouraged one to bill directly to your bank to save those charges, but mainly because it meant PayPal didn't lose anything on the transaction charge.

Amazon UK allows you to choose to be billed in your own currency, US $ in my case. Not 100% sure, but I think the credit card companies still hit me with a foreign transaction charge there too even though they were billed in dollars.

"Biggest rip-off they have ever devised. "

Not sure if it's the biggest, but it sure is high on the list of annoying.

Edited November 30, 2013 by Suradit69

[Ulic]

Always use the local currency where you are using your credit card.

[BlueSkyCowboy]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

My 2 cents. I pay with CapitalOne bank Visa USA. There is no foreign use charge and the rate is very good, just like the currency traders. Plus I get free miles

[Bpuumike]

Have to disagree.

I find my UK bank (Barclays) give me a very good exchange rate.

[hellodolly]

Not understanding the question.

Every time I use my foreign credit cards they did not ask me what currency I wanted to pay in. The item was priced in Baht and that is what they charged me on my bill. Some asked for a 3% handling charge but not for a while now. I buy from Amazon and they charge me in US $ because that is what it is priced in and that is where they are located. They never ask me if I want to pay in baht. Once had a over 180,000 baht bill. Gave them my Canadian credit card and not a word was said about what currency did I want to pay in. When I got the bill from my credit card company it had cost me an additional 3,000 baht give or take.

Am currently trying to figure out whiich is best to use my Visa card in an ATM or go into the bank with it. A couple of days ago I went to the AEON machine where they allow 20,000 baht maximum 40,000 baht a day service charge free.

I put one card in and got 20,000 baht then I immediately put the other card in and got 20,000 baht. When I looked at the bills ion my computer I noticed one of the banks had charged me a $5 handling fee and the other had not. Being as the exchange rate is in a constant change the difference in the two transactions was 5 baht.

Waiting to see what the bank statement shows on a 20,000 baht withdrawal from one of the bank's I made inside the bank with my passport. should not be to big a difference as the Canadian dollar has been fairly close. I have a feeling the bank added a charge to it for the extra handling of it. Will be able to find out in a few days. Next time I am going to go to the same bank get 20,000 baht out of the machine and then go inside the bank and see what the difference is.

[hawker9000]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

Agreed. And if your bank takes a surcharge for "foreign transactions" using your own currency will not get you out of it. It is usually applied EVEN if there is no exchange involved, just due to the transaction being outside of your own country. Biggest rip-off they have ever devised.

By "foreign visa card", I'm assuming you mean a card from a bank in your home country.

There are a few (a very few) credit cards, from US banks anyway, which DON'T charge a foreign transaction fee AND provide a competitive exchange rate. CapitalOne VISA is one such - they used to have a no-annual-fee version, 'not sure if that's still available or not, but 'think so - the fee-version pays double miles. If you spend much time overseas, you might consider getting one of these. Agree with everyone else, no matter what card you're using, you're going to come out ahead charging your purchases in baht, and DO mention it if they don't ask.

OT, but try NOT to use credit cards for cash advances! Banks usually start charging healthy finance charges from the day of the advance - no grace period and possibly even an add-on fee.

Edited November 30, 2013 by hawker9000

[dunks]

What about if you are using a Thai credit/debit card?

[khrab]

Always choose Baht, otherwise get royally screwed on exchange rate( and sometimes they try to use foreign currency as default without asking....I always insist on Baht)

.

.

Sample:

Last Tuesday I saw my doctor at Chiang Mai RAM hospital. While picking up the medication at the hospital pharmacy, after I paid the bill in THB, I discovered some items missing. So I had to sign another sales slip. Too late I realized it was in EUR.

Now compare:

The THB transaction gave me a rate of 43 THB/EUR and the EUR transaction only 41.5 THB.

The reason I didn't noticed was that the smart cashier had cliped my MasterCard onto the little board and the clip contains a MAGNET! After that the card was still working because is has also a chip but when I come into the situation where is only a magnetic strip reader I will be eff-you-see-kay-ee-dii.

[ozyjon]

If you use your VSA card outside your country then you are charged that countries currency then you are charged a conversion fee back to your currency and pay the card at your countries currency, watch out it can get very expensive, i have not ever heard of anyone paying for groceries at Big C and asking the check out girl they want to pay in US Dollars or UK Pounds or Bahraini Dinar,, it will always be charged in Thai baht then converted to the cards original currency, ouch.

[hawker9000]

If you use your VSA card outside your country then you are charged that countries currency then you are charged a conversion fee back to your currency and pay the card at your countries currency, watch out it can get very expensive, i have not ever heard of anyone paying for groceries at Big C and asking the check out girl they want to pay in US Dollars or UK Pounds or Bahraini Dinar,, it will always be charged in Thai baht then converted to the cards original currency, ouch.

Except see my #14. It IS possible to avoid the "fee" on the transaction, but not the "spread" (that is, the commission - if you want to call it that - specifically on the foreign exchange). However, just with respect to the spread (technically, the difference between the buy & sell rates), you'll do better most of the time with that in use by the credit cards and their banks, than with most other sources. The trouble us with the FEES that go with these transactions.

If you make your credit card purchase in dollars instead of baht, then the merchant, who of course must be paid in baht, gets to charge ITS spread on the foreign currency exchange, and that's almost always going to be MUCH higher than what your bank would charge, EVEN if there IS a foreign transaction fee involved. Use a card with no foreign transaction fees, and you come out even MORE ahead.

BTW - the fact that the dollar is doing better or worse against the baht is irrelevant. The actual, live, real-time exchange rate is always the one factored into all this. It's the SPREAD on that rate being (sometimes called the mid-market rate because it's midway between the buy & sell rates) used by the party doing the foreign exchange transactions that matters. Large spreads are more profitable for the money changers; small spreads are better for the consumer. Merchants will be using larger spreads, and if you can find their actual currency buy & sell rates, and do the math, it's sometimes jaw-dropping. THAT'S why the answer to the question at point-of-sale is always "in baht, thank-you".

[Pib]

When using your foreign credit/debit card be sure to have the transaction processed in the local currency, not your home country currency. When you allow a merchant to charge your card in its home country currency what is occurring is something called "Dynamic Currency Conversion (DCC)" which means the DCC exchange rate used by the merchant's local processing bank will be used instead of the Visa/Mastercard exchange rate. By local processing bank I mean the bank which the merchant rents this Point of Sale (POS) machines from to accomplish credit/debit card charges...swipe your card...read the card's chip. This DCC exchange rate will usually be around 4% lower than the Visa/Mastercard exchange rate. That 4% difference is pocketed by the merchant and his local processing bank. Bottom line is DCC if bad, very bad for the customer but good, very good for the merchant/local processing bank as you have basically paid approx 4% more for the item when the charge hits your home country account and that extra 3 to 5% went into the merchant/local processing bank's pocket as profit.

And do not, repeat, do not confuse DCC with whatever "foreign transaction fee" your home country "card-issuing" bank may also apply...they are completely separate fees. Say your card-issuing bank applies a 3% foreign transaction fee, even though you accepted a DCC transaction/charge in your home country currency you will most likely also be hit with your card-issuing bank's foreign transaction fee...rubbing salt into the fee wound. You will be hit with the foreign transaction whether the transaction was a DCC transaction in your home country currency or in the local currency simply because it was a transaction accomplish in a foreign country not because it maybe was a charge in a foreign currency.

Since Siam Commercial Bank (SCB) publish their DCC rates used for credit cards here's an example of accepting a DCC charge using a Visa card at a merchant who is using SCB POS machines on 29 Nov at 12:51pm (shortly after lunch)...I picked this 12:51pm time since the DCC rate can change numerous times during the day and it's closest to the midnight U.S. East Cost time time when Visa sets its daily exchange rate for the next 24 hours. Anyway, the SCB DCC rate was 30.64642 baht/USD...the Visa exchange rate was 32.06361 which mean the SCB DCC exchange rate was 4.4% lower than the Visa rate....the merchant/local processing bank pocket that 4.4% at your expense...or said another way, the charge hitting your home country bank will be 4.4% higher than if you had accomplished the transaction in the local currency/baht. And remember, if your card issing bank applies a foreign transaction fee, your home country bank will probably be hitting you with that fee also.

DCC bad, very bad for the customer; DCC good, very good for the merchant/local processing bank. Always charge in the local currency....and don't accept a DCC transaction when withdrawing funds from an ATM...same approx 4% lower exchange rate will occur although the ATM display words may give you a warm fuzzy about processing the withdrawal in your home country currency....it should be giving you a cold prickly...but it does give the ATM bank a warm fuzzy in the profit they make from you due to the lower exchange rate given.

And when transferring money from your home country bank to your Thai bank account, do not, repeat, do not allow your home country bank convert to baht before sending as you will most assuredly get a lower exchange rate than the Thai Bank TT Buying Rate used for incoming wire transfers...you could easily lose about 3% by allowing your home country bank to convert before sending....plus the Thai bank will still be apply the typical 0.25% (Bt200 min, Bt500 max) currency receipt/conversion fee...it's apply regardless of what currency the money arrives as....s"end in your home country currency."

And if you ever transfer money "from" Thailand to your home country bank be sure to let the Thai bank convert to your home country currency before sending as you'll get a better rate from the Thai bank than your home country bank will give you. Thai baht is not a reserve currency....rarely used outside of Thailand so it has a lower worth outside of Thailand...lower worth means lower exchange rate at your home country bank.

It can get confusing when and where to exchange money, but a person needs to learn unless they like losing money in the exchange/paying fees to the bank....but it sure makes bankers smile when people remain confused or unaware about exchange rates, foreign transaction fees, etc.

[BKKBobby]

If you use your VSA card outside your country then you are charged that countries currency then you are charged a conversion fee back to your currency and pay the card at your countries currency, watch out it can get very expensive, i have not ever heard of anyone paying for groceries at Big C and asking the check out girl they want to pay in US Dollars or UK Pounds or Bahraini Dinar,, it will always be charged in Thai baht then converted to the cards original currency, ouch.

Dont remember every place that have asked me if i want to pay in my home countries currency or baht. They show a slip with the cost when paying in my currency, the exchange rate and the cost in baht. Then they let you decide which option you want. Has happened in gourmet market, terminal 21 when buying groceries.

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Edited December 1, 2013 by BKKBobby

[Pib]

In the last couple of years in the places I routinely shop around western Bangkok there have been been around 4 to 6 times DCC has been "attempted" on me. By attempted I mean they initially processed the transaction in USD but when they handed me the receipt for signature and I saw both baht and USD amounts on the receipt (means it was a DCC transaction), I refused to sign, tell them to cancel and reprocess the charge in USD. They do so with no fuss...depending on the clerk's experience it takes them from 30 seconds to 2 minutes to cancel and then redo in baht.

I do see that same second slip of piece of paper come out of the POS machine which contains the exchange rate but with the exception of one time the clerk never handed it to me for review. Now USD appears on my DCC receipt because I have U.S. credit/debit cards...maybe Euro/Pound/etc., appear for cards issued from the European area....but the key is you'll see baht and your home country currency (or USD) on the receipt for signature....or maybe just your home country currency/USD.

When I'm at a store that I'm not sure if they attempt the DCC ripoff or not, or in a store that I know they always do, I tell the clerk when handing them my card assuring I have eye contact/their full attention, "Charge Thai baht, not U.S. dollars." But there have been a few times even when doing that I guess their brain must have been on automatic and they still processed the transaction as DCC....I then told them to cancel and redo in baht, they did, we are all happy. That cancellation & repossessing has always been easy and quick for me...but I've seen other posters who say the clerk/management seem clueless on how to do it or say it can't be done. Believe me, after watching the cancellation process on the 4 to 6 DCC attempted transactions on me it is indeed an easy & quick process. If a clerk/manager/store gives you a hassle in doing the cancellation/reprocessing then they are just trying to rip you off for another 4% or so....maybe they think you'll a one time customer anyway so they are not worried about pissing you off...they much prefer to make a little more money on the sale.

Now the cancelled DCC charge will still most likely hit your account for a few days before it automatically falls off....seems charges hit your account ASAP but cancellations take a few days...or at least that is how its always worked for me those 4 to 6 times. Keep the cancelled receipt the clerk gives you along with the reprocessed transaction receipt just in case it don't fall off so you can show that to the credit card company when challenging the charge....but I've never had to do that...the cancelled DCC transaction has always fell off in a few days.

The stores I've experienced that routinely attempt DCC are HomePro, Pizza Company, and Sizzler....they apparently have their POS machines set to automatically process a foreign card using DCC unless you tell them to charge in baht. Places like HomePro and Tesco Lotus don't do the DCC ripoff although I did see one recent post where the poster said their Lotus store recently started doing DCC. The decision to process foreign card using DCC can be a cooprate headquarters decision for all its stores (I think Pizza Company and Sizzler are like that) or an individual store decision (I think HomePro is like that). But I expect locations where there are many tourists like central Bangkok, Pattaya, Phuket, etc., the DCC ripoff occurs more often in stores, hotels, etc., since I expect many tourists don't even notice it's occurring or don't want to cause even the smallest scene with a checkout clerk.

DCC bad, very bad for the customer; DCC good, very good for the merchant.

[Pib]

Below is what Visa has to say about DCC. Notice where Visa says the merchant is applying a service fee to accomplish the DCC....that is, a service fee that goes into the merchant's/local processing bank's pocket. And what did you get in exchange for this service fee (i.e., lower exchange rate)? Well, you got a higher charge hitting your home country card account due to the lower exchange rate, you effectively paid more for the purchase than required, and a receipt showing the charge in your home country currency. That's definitely being serviced from behind.

What is dynamic currency conversion?

Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants – not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant’s local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.

Here’s an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.

The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.

The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.

If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant’s local currency, which will then use Visa’s conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge.