Which Currency With Credit Card Purchase?

[Sophon]

40 minutes ago, Langsuan Man said:

The top number is what 50,000 THB was when the charge was rung up correctly in Thai Baht and is from  my credit card statement                 ( $1,352.02)

 

The problem you are having is you didn't notice that the VOID charge slip is the amount in dollars that I would have been charged                     ( $ 1,522.87) if I had not forced them to void it.  Same day, same amount of Thai Baht,  but the difference is $170.85, which is what I saved by  forcing the transaction for 50,000 THB to be done in Thai Baht, not in US dollars 

I understand that the top number is the amount charged on your credit card statement when charged correctly in THB. However, it clearly says that the exchange rate used by your credit card company was 34.949926776  and USD 1,352,02 at a rate of 34.949926776 is THB 47,253 - not THB 50,000.

 

Sophon

[Sophon]

Or to look at it from the opposite point of view; If the USD 1,352.02 you were charged were really to cover a charge of THB 50,000 then your credit card company would have given you a rate of 36.98 THB/USD. The highest the USD has been over the last 10 years is 36.505 so you must have been charged for less than THB 50,000 (unless this is a very old charge).

 

Just a guess, but is it possible that the THB 50,000 was Pattaya Intl. hospital's estimate for your procedure, and to make sure they were covered they did a pre-authorisation for that amount? And when they did the actual billing after finishing your treatment, the total cost came out at THB 47,253 so that was what they actually charged your credit card in the end.

 

I totally agree that DCC should be avoided, but you seem to be comparing the equivalent in USD of two different THB amounts. With your numbers you would have been overcharged by more than 12%, and I have never heard of anyone being overcharged that much by using DCC.

 

Sophon

[Skeptic7]

Thai Baht...always. Previous posters are correct...you will pay more if you choose your card's home currency. Another money saving tip...make sure your credit card has "No Foreign Transaction Fee"! I have a BofA card that charges 3% on foreign transactions. I don't use it. I do use my CapitalOne Quicksilver card with NO Foreign Transaction Fee and pays 1.5% cash back on ALL purchases. 

[onthesoi]

17 hours ago, Swiss1960 said:

 

Naughty me to have quoted you.. now I think I should not do that never again... or not...

 

But... you should stop posting wrong information like what I put in bold, italic and underlined... you do NOT always get the MasterCard rate. I worked in the credit card industry in Switzerland for 20 years and I do KNOW that this is not true for several banks all around Europe and clearly in line with the regualtions of MC. 

 

 

That is just plain wrong ...I always get the mc rate and no additional charges.

 

Sounds like you're not doing it right

[Pib]

Always ensure the charge is in local currency (e.g., Thai baht) because the Dynamic Currency Conversion (DCC) rate given by the business in coordination with their local transaction processing bank (i.e., the bank providing the machines that you card gets stuck into)  will give a significantly lower exchange rate (usually in the approx 3% lower ballpark).  That lower exchange rate is pure extra profit for the business/local transaction bank at your expense.  A 3% lower exchange rate means a 3% higher charge in your card's home currency hitting your bank/credit card account.  

 

And if your debit/credit card carries a foreign transaction fee and depending on your card's policy, even though the charge hitting you account has been converted to your card's/home country currency already where Visa/Mastercard did not have to get involved in the currency conversion you card issuing bank may still apply the foreign transaction fee simply.  Not because Visa/Mastercard/your card-issuing bank had to do any currency exchange, but simply because the translation was a foreign transaction in any currency.  This means you got hit with the lower DCC rate and your card-issuing bank foreign transaction fee----and so, so many people just don't understand they are being hit with the fees.

 

DCC good for the merchant; DCC bad for the customer.   If you knowingly accept a DCC transaction on at ATM withdrawal or purchase just write "I'm Stupid" on your forehead or hang a "I'm Stupid" sign around you neck.   Below website give a good summary of DCC I think...and why you should avoid it.

https://thepointsguy.com/2015/06/dynamic-currency-conversion/

 

 

And here's how Visa explains a DCC transaction....and they are being nice about it since merchants are the key source of Visa's businesses...but where Visa mention a 2.5% markup fee that means you get a 2.5% lower exchange rate from the merchant which means you end up paying 2.5% (or more) in your home country currency....the charge that hits your account.
 

Quote

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.

 

[Pib]

On 5/15/2017 at 7:56 AM, Swiss1960 said:

Second, it is NOT always the exchange rate from VISA / MasterCard that will be used, if you pay in your credit card's currency. Credit card issuing banks have the right to set their own exchange rates, independant from VISA / MasterCard and they could decide to add an exchange rate adjustment of i.e. 1.25% to the exchange rate of VISA / MasterCard. Whether they do that or not, should be found in the T&C of your credit card. Some banks - including the one I worked for - even have different exchange rates based on the product they sell, i.e. gold cards get better rates than standard cards. 

 

I think what you are saying here is the card-issuing company applies their own 1.25% fee to the Visa/Mastercard baseline rate.   Or what is better known to most as a card-issuing bank/company foreign transaction fee or cross border transaction fee.  The Visa/Mastercard rate is still used as the baseline/starting point and then the  card-issuing bank reduces that rate by 1.25% for business (profit) purposes.  

 

Very common for many cards (debit or credit) in all countries to carry a foreign transaction fee "which is a result of the card-issuing bank or company not absorbing the Visa/Mastercard conversion fee of approx 1% and/or then adding some additional fee for profit.  Very common to see cards carry a foreign transaction fee of 2.5% to 3% which would represent the Visa/Mastercard approx 1% conversion fee plus another 1.5 to 2% profit fee.   Aome banks/companies do indeedhave various cards which may or may not come with a foreign transaction fee for preferred customers, maybe a card that has an annual fee compared to no annual fee, etc.  

 

Below is a cut and paste from the Visa website that talks rates and how card-issuing banks/companies may adjust the rate (i.e., add a fee which effectively lowers the rate).   Would apply to Mastercard also. Visa seems to be a lot better in explaining things on their website than Mastercard.   Visa is nicely saying below since card-issuing banks/companies are their customers that some banks/companies effectively lower the baseline rate via application of a fee.  

 

Quote

How does Visa calculate its rate?
Every day, except weekends, Christmas Day and New Year's Day, Visa calculates the rate for the next day's transactions. The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate in billing cardholders. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives. 

 

Best to have no foreign transaction fee cards, which although in the the minority of cards and are easier to get in some countries, because a person is not impacted by a rate adjustment, fee application, foreign transaction fee, cross border fee, just what ever term is used to say "a fee has been applied which effectively lowers the rate."   The Schwab debit card is one frequently mentioned on websites....I have several U.S. debit and credit cards that do not charge any foreign transaction fee....therefore the exchange rate hitting banks/credit card account always match the Visa/Mastercard exchange rate to several decimal points.

 

And even when not talking Visa/Mastercard exchange rates all banks will set their own rates such as TT for wire transfers, Notes/Cash for cash, Traveler cheques, etc.   These rates can be usually be seen at individual banks/companies web sites.

 

But one rate you will not see at their websites is the ATM/card purchase rates because they use the Visa/Mastercard rate and then adjusted (downward) for any fee the card-issuing bank/company may apply.   For Thai bank/company issued credit cards the typical foreign transaction fee is 2.5%

[Pib]

Forgot to mention how I love some bankster talk...like below partial quote from few posts up regarding how Visa explains DCC.   I just love the "Cardholder Preferred Currency CPC" phrase.   That's Visa's way of trying to talk nicely about DCC to help shield the merchant....CPC implies it was the customer who chose the currency to process the charge in...don't blame merchants who are our (Visa) key customers.   So, when you get hit with (accept) a DCC transaction just blame yourself---which is indeed pretty much true.

 

Quote

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.

 

Edited May 16, 2017 by Pib

[Henryford]

Thai baht gives you a better rate but then they hit you with a currency conversion charge. I doubt there is much net difference.

[skatewash]

15 minutes ago, Henryford said:

Thai baht gives you a better rate but then they hit you with a currency conversion charge. I doubt there is much net difference.

You are assuming that if you pay in your home currency (dynamic currency conversion) that you will avoid the foreign transaction fee (which might be what you are referring to as a currency conversion charge).  That's often not the case.  You can be hit with both a less favorable exchange rate AND a foreign transaction fee when using dynamic currency conversion.  I can't imagine a situation in which dynamic currency conversion is a better deal than paying in the local currency. 

[OliverKlozerof]

10 hours ago, Skeptic7 said:

Thai Baht...always. Previous posters are correct...you will pay more if you choose your card's home currency. Another money saving tip...make sure your credit card has "No Foreign Transaction Fee"! I have a BofA card that charges 3% on foreign transactions. I don't use it. I do use my CapitalOne Quicksilver card with NO Foreign Transaction Fee and pays 1.5% cash back on ALL purchases. 

(I suppose I should google it but...), how does a 'Merican living in LOS obtain one of these CapitalOne Quicksilver cards? Sounds like the schnitzel.

[skatewash]

3 hours ago, OliverKlozerof said:

(I suppose I should google it but...), how does a 'Merican living in LOS obtain one of these CapitalOne Quicksilver cards? Sounds like the schnitzel.

http://letmegooglethat.com/?q=Capitol+One+QuickSilver+credit+card&l=1 
 

Note that you will need a physical residential address to apply for this card as stated in the FAQ below:
 

Quote

 

Can I use my private mailbox to apply (P.O. Box/CMRA - Commercial Mail Receiving Agency)?
 

Unfortunately, under federal law a physical address is required to process your application. You can always change your address to a private mailbox such as a P.O.Box or Commercial Mail Receiving Agency once your account is opened. We'll also keep your physical address on file.

Will my application be declined if I don't use a physical address?

You can continue your application using a private mailbox like a P.O. Box or Commercial Mail Receiving Agency, but we'll have to contact you for a physical address before processing your application. This could mean waiting an additional 2 weeks to get your card. However, once the account is opened, you can always change your mailing address to that of your choice. We'll also keep your physical address on file.

 

 

 

Edited May 16, 2017 by skatewash

[Skeptic7]

7 hours ago, Henryford said:

Thai baht gives you a better rate but then they hit you with a currency conversion charge. I doubt there is much net difference.

A-N-D...you would be wrong. There is a noticeable difference which really adds up for those who charge everything possible.

 

Not only can real money be saved using this method, but for those with a zero foreign transaction fee cashback rewards card, who pays the balance off every month, thus avoiding any finance charges...the user actually makes real money. 

[Pib]

Yeap, the merchant DCC rate is usually around 3% lower than the Visa/Mastercard rate.  The Visa/Mastercard currency conversion fee is approx 1%.  So, best case you are approx 2% worst off selecting/allowing a DCC transaction if any/all card-issuing foreign transaction fees are ignored.

 

And you are 3% worst off if your card-issuing bank does not have a foreign transaction fee which means they absorb the Visa/Mastercard currency conversion fee.

 

And you could be 6% worst off if your card-issuing bank does have a typical foreign transaction fee of 3% and apply this fee regardless of whether they were involved in the currency conversion; they charge the fee simply because it was a foreign transaction in any countries....they don't care if it was a DCC transaction or not.   Some card-issuing banks do it this way; some don't.

 

DCC good for the merchant or ATM operator; DCC bad for the customer.    But many customers simply don't understand a DCC transaction and get a warm-fuzzy by seeing the charge in their home country currency during the transaction....a warm fuzzy that is really picking money from their pocket.   The only warm fuzzy really being given is the extra profit to the merchant (or ATM operator) at the customer's expense.  

 

I say ATM operator also as ATM can also offer a DCC transaction during your cash withdrawal but it will not be called a DCC transaction...it might be called Bank rate or some warm & fuzzy vague name.  Don't accept that offer; select the continue without conversion (or similar wording) which means you are saying no to the DCC transaction and you will get the higher Visa/Mastercard exchange rate versus the lower DCC rate.

 

Can I say it again: DCC good for the merchant or ATM operator; DCC bad for the customer.

 

 

[KneeDeep]

On 15/05/2017 at 4:08 AM, humqdpf said:

I used to agree that it was always better to have the amount charged in the local currency and then to have the conversion done by your home bank. This wasn until I found that Barclays (and not just them, ALL banks in the UK do this) were exchanging so far from the mid-point of the exchange rate and it was costing me a lot of money. Even when I went to transfer a sizeable sum and tried to negotiate with them, they refused to - I use a different transfer service now rather than the banks that gives me better rates (mid rate at the time of ordering) and lower charges.

 

This is not quite right. If you are writing about spending on cards, there are many options in the UK that don't load the rate.

For both purchases and ATM withdrawals;

Halifax Clarity

Creation Everyday

CUMBERLAND PLUS

Loot.io and more

 

and many more options for purchasing

 

For bank transfers; Halifax and HSBC allow you to transfer in Pounds. They charge £9.50 and £4 respectively.