Travelling & the art of currency conversion
per cent in the currency conversion and you are also saved from paying the DCC service charge of 2.5-3.5 per cent. Visa/MasterCard too charges a fee up to 2 per cent for currency conversion but these charges are comparatively less than charges applied for DCC.
Tackling the DCC
If a merchant offers this service, you should preferably decline it, since the rates of conversion used are mostly higher than any fee you are liable to pay for having the billing done in the foreign currency. Examples of an overcharge up to 6.5-7 per cent are actually seen in the real world. As a precautionary practice always check your receipt, and if you see anything involving your home currency in a country that doesn’t use your home currency, ask the merchant to recalculate the amount in the foreign local currency. In some cases, the merchant may claim that their credit card terminal automatically does the conversion, but Visa/MasterCard merchant agreements generally require the merchant to offer transactions in foreign local currency.
Your Rights
Visa/MasterCard requires the merchant to disclose the DCC charges and provide customers with a choice of getting the bill in foreign or the domestic currency. If you do not want to use DCC, you have the right to refuse the offer and have your transaction billed in the foreign local currency.
Author is CEO, Bankbazaar.com
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