Article: Why is Dynamic Currency Conversion Even Legal?

[Zero]

DCC is not possible with Amex.

Visa and Mastercard publish their exchange rates in advance, so it is always possible to know exactly what you will be charged to the cent (provided you have internet access at the right time and you know what your bank's fee will be).

Currency Converter – Exchange Rate Calculator

Exchange Rates & Currency Conversion Calculator – Use the converter to get an indication of the rate you may receive when using your Visa card. Learn more.

www.visa.com.au

Mastercard Currency Converter | Currency Exchange Rate Calculator

Mastercard currency converter tool calculates foreign exchange rates for all the major currencies worldwide to enable cross-border purchases and ATM transactions.

www.mastercard.com

The Visa exchange rate is updated at midnight UTC, currently 11am Sydney time.
The Mastercard exchange rate is updated at 3.05pm Eastern Time (US), currently 7.05am Sydney time.

(Mastercard used to only publish its exchange rate a day or two late, but this changed in August 2020.)

All my foreign transactions with cards issued by banks in 3 different countries have always used the exact rates quoted by the websites I linked above at the time of the transaction (there seems to be several minutes of leeway with the Mastercard one if you are doing the transaction around 3pm ET).

I believe the HSBC Aus debit card (the one which gives 2% cashback for contactless txns inside Aus) is an exception for certain currencies, where it uses HSBC's own exchange rates.

 

[marki]

DCC is not possible with Amex.

Visa and Mastercard publish their exchange rates in advance, so it is always possible to know exactly what you will be charged to the cent (provided you have internet access at the right time and you know what your bank's fee will be).

Currency Converter – Exchange Rate Calculator

Exchange Rates & Currency Conversion Calculator – Use the converter to get an indication of the rate you may receive when using your Visa card. Learn more.

www.visa.com.au

Mastercard Currency Converter | Currency Exchange Rate Calculator

Mastercard currency converter tool calculates foreign exchange rates for all the major currencies worldwide to enable cross-border purchases and ATM transactions.

www.mastercard.com

The Visa exchange rate is updated at midnight UTC, currently 11am Sydney time.
The Mastercard exchange rate is updated at 3.05pm Eastern Time (US), currently 7.05am Sydney time.

(Mastercard used to only publish its exchange rate a day or two late, but this changed in August 2020.)

All my foreign transactions with cards issued by banks in 3 different countries have always used the exact rates quoted by the websites I linked above at the time of the transaction (there seems to be several minutes of leeway with the Mastercard one if you are doing the transaction around 3pm ET).

I believe the HSBC Aus debit card (the one which gives 2% cashback for contactless txns inside Aus) is an exception for certain currencies, where it uses HSBC's own exchange rates.

I did not know about AMEX. But that explains the transaction charges they are protecting.

 

[serfty]

Came across this last night at a hotel in Japan.

At least I had a choice ... I was presented with a selection of AUD159.60 or JPY14635.

I took the latter on my 28° and was charged $152. That's 5%.

 

[serfty]

The worst I have experienced so far is 15%:

Post in thread 'What cheeses me off'

Sep 10, 2024

Direct Currency Conversion - you have to be alert.

Today I was paying for a hotel booking MYR998 using my 28º and the pinpad was handed to me to enter my PIN - I saw on the screen AUD399.

Handed back and said I wanted to pay in MYR, they indicated what to do and the transaction completed. I have checked my account and the authorisation is AUD347.

$52! That's spot on 15% - really taking the p!55

Mastercard Currency Converter | Currency Exchange Rate Calculator

Mastercard currency converter tool calculates foreign exchange rates for all the major currencies worldwide to enable cross-border purchases and ATM transactions.

www.mastercard.us

• serfty

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[jkbaus]

Using a credit card to withdraw from an ATM will usually mean you are paying a cash advance fee. Rate varies according to which bank’s card you are using. Usually between 2-5%, sometimes capped at say $20.

 

[SYD]

ForEx rates depend on the card. I think 2.5% is pretty common but some cards offer a 0% mark up meaning you are saving quite a bit by declining dynamic currency conversion.

Actually, most Oz issued VISA / MC cards have about 0.5% fee.

It’s the bank/card issuer that may charge 3% international transaction fee on top (notable exceptions being Latitude 28° MC, NAB Rewards VISA and a gaggle of DCs eg UBank, ING, MacBank etc).

Some cards offer as much as double points when you make a purchase in a foreign currency.

Unfortunately, for the Oz audience, there are very few points earning cards with no international tx fee.

That is something to watch out for. Generally, I discourage people paying with cash when abroad if they can help it. You'll generally get the best exchange rate charging things directly to your card

Withdrawing cash from an ATM will produce the same or very similar FOREX result as CC/DC. So long as your bank doesn’t charge an OS ATM, and the actual ATM doesn’t charge a fee. Those DCs mentioned above (and others), usually don’t charge an ATM fee. Outside North America, there are still plenty of countries that don’t have local ATM fees.

But yes, if it’s a generally cashless country, using card is better.

 

[marki]

Came across this last night at a hotel in Japan.

At least I had a choice ... I was presented with a selection of AUD159.60 or JPY14635.

I took the latter on my 28° and was charged $152. That's 5%.

How is 28°? I had to cut it up before getting a home loan. But now I wonder if it is something I should be looking at again.

 

[marki]

It’s the bank/card issuer that may charge 3% international transaction fee on top (notable exceptions being Latitude 28° MC, NAB Rewards VISA and a gaggle of DCs eg UBank, ING, MacBank etc).

CLAP- Other notable exceptions are CBA Platinum (a relief, I might add) and USA AMEX (Centurion). So-called shopping like a local.

 

[marki]

Actually, most Oz issued VISA / MC cards have about 0.5% fee.

It’s the bank/card issuer that may charge 3% international transaction fee on top (notable exceptions being Latitude 28° MC, NAB Rewards VISA and a gaggle of DCs eg UBank, ING, MacBank etc).


Unfortunately, for the Oz audience, there are very few points earning cards with no international tx fee.

Withdrawing cash from an ATM will produce the same or very similar FOREX result as CC/DC. So long as your bank doesn’t charge an OS ATM, and the actual ATM doesn’t charge a fee. Those DCs mentioned above (and others), usually don’t charge an ATM fee. Outside North America, there are still plenty of countries that don’t have local ATM fees.

But yes, if it’s a generally cashless country, using card is better.

I used a CBA card and its debit function to withdraw cash from an ATM in Europe, with zero ATM and transaction fees (using the M/C standard conversation rate).

 

[SYD]

I used a CBA card and its debit function to withdraw cash from an ATM in Europe, with zero ATM and transaction fees (using the M/C standard conversation rate).

Yes, there are several - my NAB Signature Debit card is fee free - although I rarely use it (comes free with a Private Banking package - usually costs a motza). But I have UBank and ING also (fee free).

 

[SYD]

How is 28°? I had to cut it up before getting a home loan. But now I wonder if it is something I should be looking at again.

They introduced a monthly fee that went down like a lead fart. A lot of us were fortunate to get that waived for a year.

 

[marki]

They introduced a monthly fee that went down like a lead fart. A lot of us were fortunate to get that waived for a year.

LOL, I am not going back if the lead fart is in the way.

 

[kpc]

They introduced a monthly fee that went down like a lead fart. A lot of us were fortunate to get that waived for a year.

I didn't get offered a waiver despite being nearly a 20 year customer....emailed and rang up to ask but denied so cancelled the card (was a backup to my BW World MC)

 

[SYD]

I didn't get offered a waiver despite being nearly a 20 year customer....emailed and rang up to ask but denied so cancelled the card (was a backup to my BW World MC)

OT, but were you using the card regularly? We both have been hammering ours regularly post Covid.

Back to topic, the 28° MC is a regular for triggering DCC however. I occasionally will use a debit card overseas (ING or UBank - both VISA) and less likely to see DCC offered.

 

[Kremmen]

Generally, I discourage people paying with cash when abroad if they can help it. You'll generally get the best exchange rate charging things directly to your card plus you don't have useless cash sitting in your wallet when you're done with your trip. If you do need cash and are abroad your best bet is to go to a bank's ATM and use your credit card (not debit card) to withdraw cash.

In Asia, this is not necessarily a good idea. You can find foreign exchange booths that give you rates within 1% of the mid-rate. (If you carry large USD notes, you can get much closer than that!) In Thailand, most ATMs charge a 220 baht fee (over $10) for all foreign card transactions, which is a huge percentage on most withdrawals.

 

[bpcmemorial]

slightly off-topic, but watch for the same when buying from overseas websites like amazon or paying for anything from overseas with paypal. They will try to do the same, charge you in AUD with a marked-up exchange rate, it’s the default. Assuming you have a fee-free card (I’m with macquarie) always click through and select to be billed in the foreign currency not AUD

 

[Gredgy69]

I didn't get offered a waiver despite being nearly a 20 year customer....emailed and rang up to ask but denied so cancelled the card (was a backup to my BW World MC)

kpc, how do you find the BW World MC? I am looking at applying for one for our upcoming Europe trip. My other card is the Amex Explorer.

 

[Lockyer Man]

I totally agree with the article. I have been fully aware of DCC for many years and have never found that using a cc overseas and charging in Aussie $ is the best rate. I will sometimes ask the establishment that offers DCC how much they will charge in AUD and I then do my own exchange rate calculation and have never been able to get a better deal using DCC.

That said, I always carry AUD cash with me overseas and have always saved money by exchanging cash for cash and settling bills that way. Of course, this system is not always acceptable for all business or leisure travellers so cash versus cc in the local price should be the preferred options.

 

[elanshin]

Whilst not directly in person, I have sometimes found amazon or Alibaba conversions to actually be good - good enough that I'll swap from a non (or low earning) card to a high earning card. This is certainly the exception and likely exists because these huge global marketplaces operates with all major currencies anyways.

 

[Beano]

All good advice. I always select the currency of the country I am in.