When you travel outside of your card’s currency area, you are often prompted a choice, sometimes forced, to use the currency of your card instead of the country where you are, like what happened to me a few days ago here in Japan.

Maybe businesses have found an easy way to extract an extra 2% to 3% from their unsuspecting foreign guests when they check out by offering a Dynamic Currency Conversion (DCC) option, which they sometimes choose without any consultation.

Unlike what happened in Mexico City in early January (read more here) and later in Barcelona, where the driver scammed an extra few % by choosing a currency other than the Euro, the Japanese always ask if you would like to use the currency of the card or the country if you haven’t already told them to settle in yen.

What I like about these slips is that they clearly show the extra fee you would pay for this “convenience” that your bank probably does for free (if you travel with cards that charge FX fees, it is time to find a new provider).

The slip above clearly states that they use the Reuters Wholesale Interbank rate but mark it up by 3.99%.

Businesses are offering DCC not for your benefit but for their own, as they split this “fee” with their merchant account provider.

Our Dynamic Currency Conversion Coverage:

Whine Wednesdays: Forced MXN To USD Currency Conversion (DCC) At Mexico City Restaurant

Whine Wednesdays: Crazy ATM Conversion Offers In Greece (July 2023)

Beware Of ATM’s & Currency Exchange Services On Cruise Ships (Insane Fees)! (September 2022)

Remember Always Choose The Currency Of The Country You Are In (June 2022)

Reader Email: Another Marriott Scam In Greece (Hotel Processes Prepayment Using DCC) (July 2021)

Whine Wednesdays: Ridiculous ATM Conversion Fees (January 2021)

Whine Wednesday: Crazy ATM Currency Conversion! (February 2020)

Whine Wednesday: Non Disclosed ATM Exchange Fees – Case Piraeus Bank Greece (July 2019)

Whine Wednesdays: Dynamic Currency Conversion (DCC) Scam (Why It Pays To Use Amex) (October 2018)

Dynamic Currency Conversion (DCC) Example From Hilton Beijing (February 2018)

Reader Question: How To Avoid Dynamic Currency Conversion (DCC) Scam In China? (July 2017)

Be Careful When Renting Cars From Sixt Germany With Foreign Address / Credit Card (DCC Scam) (May 2017)

REMINDER: Check Those Credit Cards Slips Carefully For Not Getting DCC Scammed (May 2017)

Whine Wednesdays: “Forced” Dynamic Currency Conversion & Clueless Front Desk Clerks At JW Marriott Delhi AeroCity (July 2016)

Dynamic Currency Conversion: Case Hyatt Regency Phuket THB To CAD (March 2016)

Whine Wednesdays: Evil Raiffeisen ATMs In The Balkan (Terrible DCC Attempts) (July 2015)

SCAM: Dynamic Currency Conversions In Full Swing (Case: Park Hyatt Beijing) (July 2015)

Whine Wednesdays: Dynamic Currency Conversion Scam With A New Twist: Case InterContinental Cairo Semiramis (December 2014)

Whine Wednesdays: Dynamic Currency Conversion (DCC) Scam (September 2013)

Evil Credit Suisse ATM’s With Dynamic Currency Conversion at Zurich Airport (December 2012)

Withdrawing Money from the ATM’s at the London Heathrow Airport? Don’t Fall on the Travelex Currency Conversion Scam. (February 2012)

Dynamic Currency Conversion (DCC) And Why You Should Always Decline (November 2011)

Conclusion

The merchant usually says that it is easier for their guests or clients to understand the charge if it is done in their (card’s currency), but only the financially and math-challenged would pay anywhere from 4% to 8% for this privilege in the case of card charges or up to 15% when withdrawing cash from ATMs.

I certainly have made a mistake a few times when traveling and having cards issued in multiple currencies when presented with the DCC option and chose wrongly.

You often have to “decline” the DCC by pressing a RED button on these machines, which is somewhat like denying the transaction taking place altogether, but this is not the case.

American Express is the only safe choice, as, unlike Visa and Mastercard, it doesn’t allow its merchants to inflate the transaction value by converting the currency (and probably Amex might also benefit from this with its own FX conversion rates).

Source