Using a credit card from home in thailand

[advancebooking]

If I use my credit card from the Nanny state here in thailand... They ask me if I want them to charge dollars or baht. Which option is more favourable?

Thanks

[Jiu-Jitsu]

Depends on which credit card. But Baht is usually the correct answer.

[KhunBENQ]

BAHT !!!!

Never let anyone charge you in your home country (DCC) neither at a sales counter nor at an ATM.

DCC will give you terrible rates determined by the seller or ATM operating Thai bank.

[KhunBENQ]

Should read of course: "Never let anyone charge you in your home country currency".

Edited January 21, 2016 by KhunBENQ

[Pib]

Charge in baht or whatever the country's local currency is. Letting them charge in your home country currency is called a Dynamic Currency Conversion (DCC) where you get the exchange rate set by the merchant/his local transaction processing bank---that rate will be approx 3 to 4% lower than the card network (Visa/Mastercard) exchange rate. And if your card carries a foreign transaction fee (common to see 1 to 3%) then you may still get charged that fee by your home country card-issuing bank not because any currency conversion occurred on their end but simply because it was a foreign transaction done in any currency. So, a double whammy can hit you with a DCC transaction.

If the receipt for signature shows both baht and your home country currency that is a DCC transaciton...stop...don't sign...tell them to cancel that transaction and run again in Thai baht. It only takes them about 2 minutes to do that no matter what some merchants may say. If unsure if a merchant defaults to using DCC when handing your card to the checkout clerk and with eye contact say, "Charge Thai baht, not whatever currency your card is issue under." Ex: Charge Thai baht, not U.S. dollars. Charge Thai baht, not UK pounds. Etc.

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

[OJAS]

Definitely have the amount charged in THB if using your credit card in Thailand. If you select the USD option (if available), you might end up being faced with 2 sets of conversion charges:-

(1) By your home bank for the initial USD conversion.

(2) By the merchant for the subsequent USD-to-THB conversion (which, in practice, be more likely reflected through an unfavourable exchange rate used for his USD calculation).

On the other hand, you should, of course, only be faced with your home bank's conversion charges if selecting the THB option.

And, related to the DCC point (although, admittedly, not quite the same), I can recall an occasion several years ago when I used my UK credit card to pay for a hotel bill in Bangkok. Since the slip which I was asked to sign indicated the amount in both THB and GBP, I naturally assumed that it was the stated GBP figure that would be charged to my credit card account. Wrong! When I subsequently received the credit card statement, it became evident that the payment had been processed in THB, with my UK bank then applying their standard conversion charges to result in a somewhat higher actual GBP figure that was charged to me!

[Balance]

It would seem that any commercial transaction you charged on an foreign card would automatically be in Bhat. The problem comes in the exchange rate. I try not to use my American cards. I get a much better deal transferring money to BKB and using a Thai Debit Card.

[howrub]

It would seem that any commercial transaction you charged on an foreign card would automatically be in Bhat. The problem comes in the exchange rate. I try not to use my American cards. I get a much better deal transferring money to BKB and using a Thai Debit Card.

My experience is absolutely contrary to that. It is always advantageous to use a US credit card and insist on being charged in Baht UNLESS YOUR CARD CARRIES A FOREIGN TRANSACTION FEE. I've always gotten an extremely favorable rate that way to any I could get transferring USD to Thailand by any means, including large wire transfers.

[mydee]

Yes you certainly can use credit and debit cards issued overseas by foreign banks here in Thailand, but you may do so at your own peril. I am not sure what particular "nanny state" you are from, but I suspect it is standard practice worldwide for the bank that issues the card to levy in the case of one card I have this is an extortionate 3% on overseas purchases.

Fortunately I have a no fee card that offers a pretty good exchange rate (they make their money from the poor unfortunates who can't pay the card balance off each month about 25% pa So it pays to shop around) With this card I would not withdraw cash here because the 25% interest rate take effect from the date you withdraw the cash.

As to choosing for you transaction to be charged in baht or your home currency. Invariably you will get a better deal if you choose baht, otherwise the ambush you with a terrible exchange rate.

[abrahamzvi]

It would seem that any commercial transaction you charged on an foreign card would automatically be in Bhat. The problem comes in the exchange rate. I try not to use my American cards. I get a much better deal transferring money to BKB and using a Thai Debit Card.

My experience is absolutely contrary to that. It is always advantageous to use a US credit card and insist on being charged in Baht UNLESS YOUR CARD CARRIES A FOREIGN TRANSACTION FEE. I've always gotten an extremely favorable rate that way to any I could get transferring USD to Thailand by any means, including large wire transfers.

To start with most Credit/Debit cards carry a foreign transaction fee between 1.25 and 3 %. Then, if you use a foreign card and withdraw THB you pay a Baht fee of 200 THB. The rate that the Thai banks use for exchanging USD (or for that matter EUR or GDP) is the lowest possible, so can you tell me where is the advantage over transferring the money from the US, or European or UK bank to Thailand. The exchange rate is the highest (TT Transfer) and the charges are low, depending on the bank in your home country.

[bazza40]

Baht, no question. Dynamic Currency Conversion ( DCC ) should be replaced by another acronym, LT ( Legalised Theft )

[Coyoti]

I only use a US credit card for an emergency, such as a hospital bill, or sometimes for lodging. I have a card with a low foreign service charge and low interest rate. As others have said, it pays to insist on paying in Baht, not USD. I always check http://daytodaydata.net/ for the best rates if exchanging cash. For years I used Bangkok Bank to transfer funds, but found a better alternative than paying their transaction fee and okay (but not great) exchange rate. I now use Schwab Bank. You need to have a brokerage account with them. However, when compared to BKB rates, it looks like they use the TT rate, plus they refund the 200 Baht ATM fee.

[Pib]

Unless a DCC transaction/withdrawal occurs where you get the local processing bank (e.g.,the local Thai bank) exchange rate, a debit/credit credit card uses the card network (Visa/Mastercard/AmEx/Union Pay/etc) exchange rate. If your card-issuing bank does not charge any foreign transaction the rate appearing on your account is the card network rate.

However, if your card-issuing bank charges a foreign transaction fee (1 to 3% is common) then that fee is worked into the rate that appears on your account. You card-issuing bank may breakout the 1 to 3% charge separately on your account or just mix it in with the total transaction amount....up to them.

Now, while the card networks typically apply approx a 1% currency exchange/foreign transaction fee that fee is not passed directly to the customer; it passed to the card-issuing bank who has the option to absorb that fee or include it in their foreign transaction fee charged to you.. If your bank say charges 1% foreign transaction fee that means they are just passing along the card network fee/not absorbing it. But lets say they charge a 3% foreign transaction fee, well, that means they are passing along the card network 1% fee to you and adding on another 2% fee for a total of 3%.

It's actually more detailed than above as for credit card point of sale credit card transactions your card-issuing bank earns a card network "interchange" fee from the local transaction processing bank usually around 1 to 2%. So if your card-issuing bank say charges a 3% foreign transaction fee to you and earn 2% from the local processing bank they are making 5% in fees off of you transaction.

Even for a debit or credit card cash withdrawal there is an interchange fee but it works opposite to a point of sale transaction where you are purchasing something. For a cash withdrawal the local processing bank earns an interchange fee from your card-issuing bank which is combination flat fee and a percentage...let's say that works out to around 2% just for example. Your card-issuing bank has to pay the local processing bank that 2% fee, but if they are applying a 3% foreign transaction fee to you your card-issuing bank still come out 1% ahead.

The banksters always win

[eppic]

As some have indicated already, the answer to this question is a no-brainer, and certainly if your particular "nanny state" is the U.S. (You specified dollars as currency, so theoretically it could be a variety of other countries including THE nanny state, Singapore). ALWAYS pay in local currency. Period.

For CC charges, if you accept dynamic conversion (pay in $) you are guaranteed to be screwed by an extra 3-5% in fx spread depending on which particular thief (err, ok, merchant and his bank) you use. Some merchants even attempt to charge in your home currency without asking you, although Thailand is not as bad as a place like Hong Kong where many/most big merchants will FORCE you to use DCC (they will not accept credit card without it -- have been in many disputes over this).

Depending on your particular credit card, you may also get hit with a 3-4% "foreign transaction fee"....key point here: You will STILL be hit with the foreign transaction fee even if you select payment in US$, because the language is intentionally deceptive (called a foreign "transaction" fee rather than "conversion" fee).

So in total, you could pay an extra 6-8+% if you have the wrong card and pay in US$

However, if you choose one of the many credit cards that have no foreign transaction fee, and choose local currency (THB), you will get an excellent exchange rate plus any other benefits that the credit card may offer (e.g., 10-20% discount plus points for one of my Citi cards, 20% off all Uber rides for my Capital One card).

So, shop around for the credit card and ALWAYS pay in local currency. Better even than using cash via a fee-reimbursing, no fx-charge ATM card such as Schwab or Fidelity (both of which I also have, but I almost always use a CC)

-----------------------

Edit: I noticed you used the word "favourable" so I suspect your particular nanny state is actually not the U.S.

Edited January 22, 2016 by eppic

[puukao]

BAHT !!!!

Never let anyone charge you in your home country (DCC) neither at a sales counter nor at an ATM.

DCC will give you terrible rates determined by the seller or ATM operating Thai bank.

so, baht, right?

5555

[Henryford]

Depends on which credit card. But Baht is usually the correct answer.

Baht is the correct answer but they will then hit you with a foreign currency conversion charge. They win either way.

[KhunBENQ]

Depends on which credit card. But Baht is usually the correct answer.

Baht is the correct answer but they will then hit you with a foreign currency conversion charge. They win either way.

Thats true. But the DCC rates that I have seen are far worse than the foreign transaction fee of the CC.

And for ATM transactions selected cards don't have such a fee.

[recycler]

I never use my credit card in Thailand, it's one of the worst countries for skimming even in the big hotels and supermarkets.

Use an ATM of one of the bigger banks or transfer to a Thai account and use a local ATM card and pay in cash.

[elgenon]

In the States it is easy to get a card w no foreign transaction fee.

[Jiu-Jitsu]

I never use my credit card in Thailand, it's one of the worst countries for skimming even in the big hotels and supermarkets.

Use an ATM of one of the bigger banks or transfer to a Thai account and use a local ATM card and pay in cash.

A bit of an exaggeration and moreso a complete contradiction in itself...as it should then be one of the better places to use a CC, as if it is skimmed then it is not your money that is at risk. Whereas if your debit card gets skimmed at a bank ATM or your local account somehow emptied, you'll have a lot more trouble getting your hands on your money.

So look smart and get yourself a decent credit card.