Credit Card use here; home currency or Thai baht?

[hhfarang]

I made a semi large purchase on a U.S. bank credit card last week and was asked at the register if I wanted the transaction charged in U.S. dollars or Thai baht. I didn't know which would come out the best.

Has anyone looked into whether it is cheaper (best rate, less fees) to use a card's home currency here or Thai baht?

[poosmate]

http://www.compareprepaid.co.uk/bank-ac ... broad.html

Did you know that when buying goods in retailers or paying a bill in a restaurant in a different currency they have the option to get you to authorise your bill in their currency but then recharge your card in sterling. This system is called dynamic currency conversion (DCC).and they can charge you an additional service fee of up to 4%.

Found this about UK cards would think same applies for all.

[sparrowman]

Always charge in local currency. If you charge in sterling they can apply their own rate of exchange which is always lower that the bank official rate.

[poosmate]

Surely even if charged in local currency there would still be a rate of exchange chosen by the issuer?
As I have read it the problem with using home currency is double charging on the exchange.

[sparrowman]

The rate charged by the issuer will be less than the rate that the store charges you

[poosmate]

The rate charged by the issuer will be less than the rate that the store charges you

The store has does not have anything to do with any currency exchange

[BaaBaa.]

The rate charged by the issuer will be less than the rate that the store charges you

The store has does not have anything to do with any currency exchange

Your post doesn't make any sense.

Am I right in saying that Ayudhya ATMs have started using the DCC?

[sparrowman]

No, what I meant was that the store can apply an exchange rate when they are working out your bill to show you the cost but this doesn't necessarily match the official rate to show you the cost in foreign currency. This is what I was told at Homepro

[PeteC]

Some excerpts from the Visa card site:

How does Visa calculate its rate?

Every day—except weekends, Memorial Day, Christmas Day and New Year's Day—Visa calculates the rate for the next day's transactions. The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate when billing cardholders by applying a foreign transaction fee. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives. Most consumers find that using Visa is a convenient and cost-effective way to make purchases and obtain cash when traveling internationally.

What is dynamic currency conversion?

Some merchants now offer to convert your purchase into your home currency. This is called dynamic currency conversion and means the merchant—and not Visa—is converting the currency. As a consumer, you may value knowing the exact price in your home currency at the point of sale, but you should be aware that you may be charged extra for this service by the merchant. Visa requires that you be provided a meaningful choice at the point of sale and you have the right to buy your purchase in the local currency to avoid any additional fees the merchant may assess. Visa also requires merchants offering this service inform you of the exchange rate, including any applicable commission being charged.

Pete

[sparrowman]

That's exactly what I meant. your explanation is much clearer than mine !

[poosmate]

I still think the whole transaction is done by the issuer not the merchant. I do not see how a merchant could alter or state the exchange rate as it is determined electronically at POS. a better explanation in my view is

For example, the following is a typical DCC transaction at point of sale. A cardholder (say, from the United States) that is traveling in Europe presents a Visa/MasterCard for payment for a product/service priced in euros. The credit card details are captured on the point of sale device (POS), which identifies that the card is a USA issued card. The cashier asks the cardholder to pay in US dollars and the POS converts the euro amount into US dollars (based on a margined daily rate). This exchange rate is a manipulated exchange rate in order to take more money from the cardholder. The cardholder signs a receipt that shows the euro amount, rate of exchange and the US dollar amount. The service guarantees that this exact US dollar amount will be debited to the cardholder account, and the exact euro amount will be credited to the merchant’s account, to the benefit of the merchant.

Bear in mind this is wikipedia so could have been written by a plum

The Homepro example was I recon a salesperson estimating with a calculator to give a rough idea of the price in foreign currency. Thais and calculators? A whole new thread.

[hhfarang]

It sounds then like the best way is to charge in Thai baht and not U.S.D. (in my case). Maybe next time I want to buy two of the same inexpensive items (like around 500 baht each), I'll go through the line twice, charge one in Thai baht and the other in U.S.D. and then see the difference on my bill. Might be an interesting outcome.