question about exchange rates and credit cards

kushaiah · Member

question about exchange rates and credit cards

Michele Erdvig · Host

Kush,

Welcome to my forum. Glad to hear my book is proving helpful. Don't forget to look at my Money page for more info.

I use Capital One in Ireland because they add NO foreign transaction fees.

Each credit card has their own rules and will charge their own fees and set their own exchange rates. The rate changes daily. Usually credit cards have a more favorable rate than you can get with cash or traveler's checks.

DCC: Look out for Dynamic Currency Conversion. With that the merchant who charges your card in DOLLARS sets the rate in their favor and adds 3.5% and more. Always charge in Euros in the Republic of Ireland and in pounds in Northern Ireland.

Michele

tony2phones · Guru

Hello and welcome.

From what I have gleaned from this and other Ireland forums your Credit Union card used in an ATM will give you a better rate than Mainstream bank cards. Irish ATM's will give you the Bank rate at the time of transaction and may vary very slightly AIB usually has a better exchange rate than Bank of Ireland by maybe 0.5 to 1%. You will not be charged by the Irish bank for using the machine only by your own Bank.

Michele Erdvig · Host

Kush,

As Tony says, many credit unions have more favorable rates. I use my credit union ATM for Ireland because my bank has per transaction charges.

You still have time to get a Capital One card. I use mine for ALL transactions in Ireland.

Michele

Mac_T · Veteran Member

kushaiah wrote:
My credit union has a card that looks promising - but I'm confused as to how I would figure out how favorable their exchange rate would be.
IOW.. if I charge $10 and the rate is 1.44 will I find a charge for $14.40 on my card or will it be higher? (my credit union will pass through to me the 1% foriegn conversion rate for Visa, so I'm ignoring that for this question)
Can I expect that different cards will exchange at different rates? Or is that rate set by the store/bank/machine that I do the transaction at? And if so, do most places charge the rate on the day of transaction, or do they add fees?

This is a great site. I've been lurking for awhile & hope to contribute something every once in awhile.

The short answer is to your question is that different cards do not charge different exchange rates. Transactions processed through Visa's payment system are converted at a rate very close to the official, published exchange rate. Of course, the rate changes from day-to-day & even intraday.

So, if your purchase is 10 euro, and the rate when the transaction is processed is $1.40 per euro, you are billed $14.00 + whatever fees the issuer tacks on. The main difference between card issuers is the currency conversion fee. 1% is pretty good, a typical rate is 3%, but as Michele & others have pointed out, there are cards (including some from Capital One) that don't charge any fee at all.

Check the url below -- it's a good tool for seeing VISA conversion rates:

http://usa.visa.com/personal/using_visa/consumer_ex_rates_us.jsp

Dynamic currency conversion is another story. It's not per se illegal, but you (the purchaser) are supposed to be notified if the vendor is going to use it. Essentially, you have the choice to be charged in dollars or the local currency. Most vendors just process in the local currency -- which is the best way to buy stuff, since you get the VISA wholesale rate. If you ask to be charged in dollars, the vendor will do it, but you probably won't get the best rate -- and that's where the opportunity for mishief lies. In short, they are not supposed to charge you in dollars without your informed consent. If a seller asks, just say no.

Enjoy your trip!

Michele Erdvig · Host

Mac,

Thanks for the info and for joining in.

DCC is a touchy kettle of fish. Yes, they are "supposed" to ask whether you want it in euros or your home currency. In theory it works. But there are a lot of ill-informed clerks in Ireland. disbelief I thought some guy was going to punch me in a Dublin pub because I insisted they cancel the transaction and re-do it in euos. The man who got hot under the collar was a bystander, a total ignoramus and a meddler. I told him to mind his own business and then ignored his tirade. My husband was not so diplomatic. furious You have to be willing assert yourself to get people to do the right thing.

Always tell a clerk to charge in euros (pounds in No. Ireland) when handing over your credit card. Every time I forgot to do it...guess what? They charged me in dollars and I had to make them do it over. At times I had to give instructions to the clerk about how to run the cc transaction properly. They automatically press the "Yes" button, which does the DCC. Some of them did not even know they could press the "No" button. Seems like I'm now an Irish clerk instructor. biggrin Guess I will add that to my resume.

Michele

kushaiah · Member

Wow.. you have to tell them how to run the transaction in euros? Is that because the machine recognizes a usa card? I can see that alot of people would get dcc when they didnt want it! Such a nasty thing to do to thise too shy to demand they do their jobs properly!

Mac_T · Veteran Member

I think we've been lucky that no one has tried to charge us in dollars when we've used the cc. I always look at the receipt & am prepared to ask them to re-run the charge in euro or pounds, as the case may be. In pubs, it's cash all the way for me, simply because I'm less apt (especially after a couple of rounds) to pay attention to the cc slip.

Michele Erdvig · Host

Kush,

Yes, the machine does recognize it is an American (or Canadian or Italian) card. I don't think most clerks do it on purpose. They are not properly trained. Or perhaps managment trains them that way so they can make extra money? Informed travelers will know what to do. The only reason I know the buttons to push is that I travel to Ireland so often I learn how things are done. Actually, if the clerks don't know how to do it they will call for the manager. But sometimes that means hanging around for another half hour. When I'm in a hurry I just tell them what to do. Maybe I'm bossy or impatient. evileye

Mac,

I would say you have been lucky with DCC. I always make them void a wrong transaction and run it again too. Lately, I've programed myself to hand over the credit card and say "Please run it in euros." They always respond with "The machine always does it in euros." Yeah, right!

Michele

becky 1 · Newbie

hi my name is rebecca i didnt no what sight to go into to find out the answear to my question.we are heading over with aer lingus to blackpool the 6 th august till the 11th august ,my husband went to post of his passport but there is all new rules out so he need new documents,but i was woundering if he doesnt have it bk in time woud an age card do him and a identity form signed and stamped by the guards .we dont have a car and none of us has a lisence.would u be able to let me no as sson as possible if that would do him if not il have to try and change my dates and give him more time to get passport,his last passport was burned in a fire in his mothers house .thank you rebecca

Michele Erdvig · Host

Rebecca,

Can I assume that you are Irish? If so your best source of info is the Irish government: http://www.gov.ie/

You can also phone your airline for details. They should be able to give you the details you need.

Michele

tony2phones · Guru

Hi Becky

Try contacting Aer lingus to see if the pass is acceptable, the next point is UK customs. Last year the neighbour lost her passport whilst visiting UK and had to get an emergency passport issued by the embassy over in London, luckily she was not far away.