Is this “convenience” just another scam?

dollar wrapI’m almost never accused of being too neutral, but when I covered a type of foreign currency exchange that affects international travelers recently, that’s exactly what happened.

I was writing about a little trick called a dynamic currency conversion (DCC), which works something like this: If you’re paying by credit card overseas, a merchant will sometimes ask if you want to make the purchase in dollars, “for your convenience.” If you agree, your money is converted from the native currency into greenbacks and sent to your credit card, but at an awful exchange rate. Bizarrely, you may still have to pay your credit card a fee for a foreign transaction — so you basically convert the money twice.
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The dangers of dynamic currency conversion

burning dollarProcessing a credit card charge for overseas purchases used to be pretty simple. You swiped your card while on vacation, your bank changed the money from pesos or euros into greenbacks, and the amount you’d spent appeared on your bill. Maybe you paid a small conversion fee, but you also got a competitive exchange rate.

Not anymore. Just ask Jae Cuadra, who recently tried to buy a round-trip train ticket between the Swiss cities of Interlaken and Lauterbrunnen. The purchase, at a train station in Interlaken, went on his Capital One Visa card, which doesn’t charge to convert foreign currencies. But “for the first time, I was offered a choice,” says Cuadra, a registered nurse from Westbury, N.Y. “Did I want to pay in dollars or Swiss francs?”
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Not so funny money tricks the travel industry likes to play

Maks Narondeko/Shutterstock
Maks Narondeko/Shutterstock

Hold on to your wallet. Businesses don’t just want to get their hands on your cash when you’re on the road — they also want more of your money, and on their terms.

Take what happened to Gordon Angell when he was visiting La Paz, Mexico, recently. Many restaurants in town display the “Visa” and “MasterCard” stickers, signifying that they accept credit cards.

But on Angell’s first evening, after finishing a meal at a restaurant, his server informed him the credit card machine didn’t work, and pointed to an ATM. He paid in pesos.

“The following evening we went to another restaurant called The Three Virgins,” he says. “We made sure that we asked them if they accepted credit cards and they said ‘yes.’ Surprisingly, when we offered to pay our bill, it was a repeat of the previous evening. Their machine was ‘not working.’ They told us to use the ATM.”
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Exchange rate rip-offs, and how to avoid them

As Jay Berman and his wife were checking out of the Henley House in London last month, a clerk asked if they wanted to pay their bill in dollars. It seemed like a good idea at the time, because they’d avoid Bank of America’s three percent foreign transaction fee.

Or so they thought.
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Headed to Europe this summer? It could be a riot

If you’re looking for a little adventure this summer — a strike, a riot or maybe even a revolution — skip the Middle East and visit Europe.

Traditionally quiet and predictable Western Europe, a magnet for many American tourists, hasn’t seen this much political and economic uncertainty in a while. As reports of economic bailouts, work stoppages, unrest in the streets and fluctuating currencies find their way back to the States, travelers wonder whether it’s safe.

I do. I’m headed to Europe twice with my family: on a Mediterranean cruise in July and a tour of Italy in early September. While none of the experts I spoke with advised me to cancel, they did caution me to monitor the situation carefully.
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