When making purchases internationally with a credit card, consumers need to be aware of three things:

1. The exchange rate in the country that they are visiting.
2. The “foreign transaction fee” that their credit card company will charge for making an international purchase.
3. How to handle “dynamic currency conversion” options that the merchant might offer.

This site has devoted considerable attention to all these topics, but recently an email from a reader exposed a blind spot in our coverage. In her email she basically asks “Who are the major dynamic currency conversion providers, what rates do they charge and is there any reason to pick one over another?”. These are very good questions, and they demonstrate a fair amount of research to even know to ask them.
Read the rest of this post

Converting money while traveling internationally is a task that almost every international traveler faces. The number of ways to convert money are increasing, but so is the number of entities looking to take a fee for the transaction. Several years ago, many travel advisors would indiscriminately advocate using credit cards to make purchases in a foreign currency. This was because many credit card issuers generally charged conversion fees that were much lower than could be achieved at foreign currency exchange booths. Additionally, the fees were near what could have been achieved at a bank, and when using a credit card the traveler would never be left with unneeded foreign currency at the end of a trip. At the end of the day, travelers got decent exchange rates, credit card issuers earned modest fees and nearly everyone was happy.
Read the rest of this post

If you’ve used a credit card internationally the past few years, odds are good you’ve paid your credit card issuer a foreign transaction fee. What you may not know is that you may have also paid a foreign transaction fee to several other entities along the way. Additionally, you probably have no idea how much you paid in fees or who actually got the money. This was the subject of a recent lawsuit. Though the lawsuit was settled, and exact details have yet to emerge, the lawsuit will likely require more transparent disclosure of fees on credit card statements. Unfortunately the lawsuit does nothing to curb the number of middlemen who take a cut of the fee.
Read the rest of this post

Planet Payment, a leading credit card merchant services provider that enables DCC fees to be charged, contacted us in response to this post about Dynamic Currency Conversion Fees. DCC has been taking a beating in the news by consumer advocates who suggest that DCC is either a “scam” or almost never in the consumer’s better interest. Planet Payment requested that we give them the opportunity to defend the DCC service. Phillip Beck, the CEO and Chairman of Planet Payment offered to answer questions about the DCC service, and we decided to take him up on his offer. His detailed responses help explain DCC from the provider’s perspective. In the interview, Beck cites credit card issuers as responsible for compounding conversion fees. Below is the full, unedited transcript of our email interview with Mr. Beck.
Read the rest of this post

When it comes to making international purchases with a credit card, there are a number of ways uninformed travelers get hit with additional fees. “Dynamic conversion” is a new option for travelers to be aware of – especially since it that can add exponentially more to the overall price of the purchase. In fact, the fees can be so extreme that some consumer advocates have taken to calling “dynamic currency conversion” a scam. Although fees are added to the purchase in such a way that consumers have almost no way of knowing the actual total fee paid, the practice is legal almost everywhere in the world.
Read the rest of this post