Choosing a currency for a cr card purchase when out of AU?

[DeKa]

Paypal is doing it now too. I bought something from dealextreme.com yesterday and Paypal try to hide it but showing you what it 'will' cost in AUD - you have to click a link "Other Conversion Options" to change it to USD. Charged to my 28 Degrees card of course.

 

[auspal]

Thanks for the info. I was on a European cruise recently and foolishly chose the AUD option, thinking that I would be saving money. I will know better next time.

 

[Alanslegal]

I use a 28 Degrees card and always elect to pay in the local (overseas) currency rather the AUD.

 

[Stephen65]

I'm pretty sure both paypal and Amazon let you select local currency as the default instead of having to go through the rigmarole of declining their rip-off AUD converted rates each time. I assume this is the case because I remember dealing with this a while ago and now they only offer me the local currency option.

I recently came across a particularly evil example of DCC when signing up to become a paid member of another forum. The charge listed on the forum's join page was US$20 per year but when I tried to sign up via the forum's billing service the charge listed to be charged to my CC was AUD$22 or something ridiculous like that (should have been about A$19). However when I selected USD as the billing currency instead the figure it gave me was not $US20 but the USD equivalent of A$22 converted at a fair rate i.e. about US$24! They were determined to get their pound of flesh from me no matter which currency I picked. Needless to say I decided not to proceed and they lost me as a customer forever.

 

[JohnK]

I am always sceptical of dynamic foreign exchange even though it may end up to my benefit.

Booked 7 nights accommodation with sawadee.com yesterday and the option was AUD221.38 or THB6,800.

I believe if I chose the AUD option then I do not pay any transaction fees or foreign currency conversion fees to Amex as it would appear as a transaction in AUD. I looked at XE.com and my estimated worse case scenario is the transaction will cost ~AUD228 if Amex uses low exchange rate for the day.

Will be interested to see what appears on my statement in the next couple of days.

 

[serfty]

You Amex may charge a Foreign Transaction fee even if it is billed in AUD - check your PDS.

 

[JohnK]

If credit card companies could still charge a foreign currency conversion fee then what is the point of dynamic foreign exchange? The merchant wants to make some extra money on foreign exchange as well?

Seems like a waste of time....

 

[serfty]

... The merchant wants to make some extra money on foreign exchange as well?

Seems like a waste of time....

It started as the merchant making a Quid from the FOREX rather than the Banks.

Soon enough after this started, the banks decided to circumvent this by charging the FOREX fee on transaction from overseas anyway. So now both the Merchant and the Bank get in for their chop.

Simply put, these days DCC is generally a very bad idea for the consumer.

 

[Stephen65]

Pretty much except that if you transact in AUD overseas the banks call it a "foreign transaction" fee instead of a forex fee. Introducing the foreign transaction fee was their way of making sure that DCC didn't deprive them of their cut of the transaction.

If you use DCC you get hit both ways - you will usually get an awful exchange rate from the merchant and you will get hit with a foreign transaction fee from the card provider.

 

[JohnK]

---

The transaction from sawadee.com has come through to the Amex statement.

It has worked out cheaper than the figure quoted on website at the payment page.

Sawadee 6,800THB or AUD221.38
Amex charge AUD218.96 (including AUD6.38 commission fee) at an exchange rate of ~31.9879.

Glad I did not take the dynamic currency conversion....