Using a US Dollar Credit Card in Bermuda

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#1
42 Posts
Joined Dec 2005
Hey there. Quick question on using a US dollar credit card while in Bermuda.

Does anyone know if purchases in Bermuda are posted by merchants as US dollars or Bermuda Dollars. Do I need to request that they are posted in USD if this is even possible in Bermuda.

I know the Bermuda dollar is pegged to the US dollar but I want to avoid my bank treating these as foreign currency conversions and charging a 2.5% fee. Although some cards are exempt, most Visa and MasterCard cards are charged 2.5% or more on top for "foreign currency" conversion. If purchases are posted as Bermuda dollars, these may be considered foreign currency conversions.

Can't seem to get a straight answer. I've checked some other forums and some report being charged others not.

Any info much appreciated.
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#2
4,454 Posts
Joined Jun 2009
Any credit card purchases will be billed in Bermudian dollars. There is no way for them to be billed as any other currency. It would be best to just use cash.
#3
17,485 Posts
Joined Jul 2007
I use credit cards that have no foreign transaction fees, and have never been charged a fee for using them in Bermuda.

I think you're confusing foreign transaction fees with currency conversion. Banks make money on currency conversion by using a below-market conversion rate . With the Bermuda dollar being on par with the US dollar, there is no conversion calculation. What you're charged at 2 to 3% is a transaction fee for using the credit card in a foreign country. By using a US bank's credit card that does not charge foreign transaction fees you're not charged anything .
#4
42 Posts
Joined Dec 2005
Originally posted by njhorseman
I use credit cards that have no foreign transaction fees, and have never been charged a fee for using them in Bermuda.

I think you're confusing foreign transaction fees with currency conversion. Banks make money on currency conversion by using a below-market conversion rate . With the Bermuda dollar being on par with the US dollar, there is no conversion calculation. What you're charged at 2 to 3% is a transaction fee for using the credit card in a foreign country. By using a US bank's credit card that does not charge foreign transaction fees you're not charged anything .
If card purchases made in Bermuda are posted as Bermuda Dollars then converted to US dollars at par, I guess these would be considered a foreign currency conversion (albeit one at par). I understand some cards don't charge the 2.5% markup so that charge wouldn't be applied in this case. What's throwing me a bit is the hotel we are staying at quotes their rate in US dollars and they tell me that it's posted as US dollars. A bit confusing. If anyone has more info that would be great.
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#5
Maryland
10,300 Posts
Joined Mar 2003
Originally posted by Sailor-man
Hey there. Quick question on using a US dollar credit card while in Bermuda.



Does anyone know if purchases in Bermuda are posted by merchants as US dollars or Bermuda Dollars. Do I need to request that they are posted in USD if this is even possible in Bermuda.



I know the Bermuda dollar is pegged to the US dollar but I want to avoid my bank treating these as foreign currency conversions and charging a 2.5% fee. Although some cards are exempt, most Visa and MasterCard cards are charged 2.5% or more on top for "foreign currency" conversion. If purchases are posted as Bermuda dollars, these may be considered foreign currency conversions.



Can't seem to get a straight answer. I've checked some other forums and some report being charged others not.



Any info much appreciated.


Simple answer is that you are charged in Bermudian currency. If your card has foreign transaction fees then the fees will be added. Best thing is to get a card that has no foreign transaction fees. I have never been charged that fee in Bermuda because I have a couple of cards that don't charge the fees.

Foreign currency conversion is something else. Something to avoid. Right now I am in London and I am making sure to be charged in pounds. Not can converted to US.
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Charles
#6
United States
575 Posts
Joined Jul 2014
Originally posted by 1025cruise
Any credit card purchases will be billed in Bermudian dollars. There is no way for them to be billed as any other currency. It would be best to just use cash.
Maybe not in Bermuda, but in many places, you can opt to pay in USD or local currency. Many hotels offer this.

DO NOT pick USD. The hotel or vendor conversion rate is HORRIBLE. The credit card converts at the bank rate.

Just pick up a card with no foreign transaction fees.
#7
17,485 Posts
Joined Jul 2007
Originally posted by Sailor-man
If card purchases made in Bermuda are posted as Bermuda Dollars then converted to US dollars at par, I guess these would be considered a foreign currency conversion (albeit one at par). I understand some cards don't charge the 2.5% markup so that charge wouldn't be applied in this case. What's throwing me a bit is the hotel we are staying at quotes their rate in US dollars and they tell me that it's posted as US dollars. A bit confusing. If anyone has more info that would be great.
Again, I suspect what you're calling the "2.5% markup" is not a currency conversion fee but a foreign transaction fee. If your card charges a foreign transaction fee you'll be charged that fee regardless of the currency used. In many trips to Bermuda over the course of 30 years I've never been charged a currency conversion fee, but only a foreign transaction fee a couple of times if I happened to use a card that charged for foreign transactions. In recent years I've always avoided that fee in every foreign country I've visited, Bermuda included, by using a card that doesn't charge it.
#8
42 Posts
Joined Dec 2005
Does anyone know if there is Dynamic Currency Conversion in Bermuda. It's pretty popular in Europe. It allows you to select the currency you want to use. For Bermuda that would be USD.

Probably simpler to just use a card that doesn't charge the 2.5% mark up on foreign exchange although we don't have many of those in Canada.
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#9
17,485 Posts
Joined Jul 2007
Originally posted by Sailor-man
Does anyone know if there is Dynamic Currency Conversion in Bermuda. It's pretty popular in Europe. It allows you to select the currency you want to use. For Bermuda that would be USD.

Probably simpler to just use a card that doesn't charge the 2.5% mark up on foreign exchange although we don't have many of those in Canada.
With the majority of visitors to Bermuda being from the US, and with the Bermuda dollar being on par with the US dollar, dynamic currency conversion doesn't make a lot of sense. Maybe some merchants might try to offer it, but DCC is something you want to avoid like the plague because merchants offer it in order to make money by using a less than normal conversion rate.
#10
104 Posts
Joined Feb 2011
I did this mistake - agreed to pay in USD while abroad. First, the conversion rate was indeed horrible. But second - guess what - BofAmerica credit card still charged 2.5% fee "because the transaction was abroad"
#11
United States
575 Posts
Joined Jul 2014
Originally posted by Sailor-man
Does anyone know if there is Dynamic Currency Conversion in Bermuda. It's pretty popular in Europe. It allows you to select the currency you want to use. For Bermuda that would be USD.

Probably simpler to just use a card that doesn't charge the 2.5% mark up on foreign exchange although we don't have many of those in Canada.
If you are talking about picking the currency on the credit card machine, as I mentioned before, the exchange rates on those are HORRIBLE. More than the foreign transaction fee.

I have seen nearly 10% difference in charging in dollars and letting the credit card company do the exchange, versus the vendor doing the conversion.

Just get a credit card with no foreign transaction fees.
#12
42 Posts
Joined Dec 2005
Thanks for the posts. It seems the consensus is that purchases in Bermuda on a credit card are posted as Bermuda Dollars and subject to the 2.5% charge. The best approach would be to use a card exempt from those charges. Unfortunately not many here in Canada are exempt.
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#13
NORTH EAST LOUISIANA USA
5,006 Posts
Joined Nov 2003
Originally posted by SRF
If you are talking about picking the currency on the credit card machine, as I mentioned before, the exchange rates on those are HORRIBLE. More than the foreign transaction fee.

I have seen nearly 10% difference in charging in dollars and letting the credit card company do the exchange, versus the vendor doing the conversion.

Just get a credit card with no foreign transaction fees.
My thoughts are that there are two charges that can be charged.
A currency conversion charge and
A foreign transaction fee
I would have a card that does not make either charge.
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#14
Maryland
10,300 Posts
Joined Mar 2003
Originally posted by scapel
My thoughts are that there are two charges that can be charged.

A currency conversion charge and

A foreign transaction fee

I would have a card that does not make either charge.


The foreign conversion fee is from your credit card. The dynamic currency conversion is something done by the merchant at point of sale. The merchant is supposed to ask but a few unscrupulous merchants do it without asking. What often happens is that the consumer gets the option but does not understand what it means. They see USD or the local currency and pick USD because it is familiar and psychologically they think that is the better option when in actuality charging in the local currency is the best option. Dynamic Currency conversion allows the merchant, merchants bank or ATM to charge a markup on the exchange rate used and that markup can be quite high.

Often the consumer gets a double whammy. If they don't have a card with no foreign transaction fees they will get charged that 3% fee and an 18% currency conversion markup for charging in USD!
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Charles
#15
NORTH EAST LOUISIANA USA
5,006 Posts
Joined Nov 2003
Originally posted by Charles4515
The foreign conversion fee is from your credit card. The dynamic currency conversion is something done by the merchant at point of sale. The merchant is supposed to ask but a few unscrupulous merchants do it without asking. What often happens is that the consumer gets the option but does not understand what it means. They see USD or the local currency and pick USD because it is familiar and psychologically they think that is the better option when in actuality charging in the local currency is the best option. Dynamic Currency conversion allows the merchant, merchants bank or ATM to charge a markup on the exchange rate used and that markup can be quite high.

Often the consumer gets a double whammy. If they don't have a card with no foreign transaction fees they will get charged that 3% fee and an 18% currency conversion markup for charging in USD!
I always have the charge in local currency so I can see the conversion rate when I get the bill.
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17. Splendour of the Seas- Fjords of Norway 1997. 18 Sun Viking –Orient Cruise 1997.
19. R-4 Barcelona-Lisbon 1999. 20. Paradise- Caribbean 1999.
21. Millennium to Baltic Capitals 2000. 22. Summit to Caribbean 2001.
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