Sailor-man Posted August 23, 2017 #1 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
1025cruise Posted August 23, 2017 #2 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
njhorseman Posted August 23, 2017 #3 Share Posted August 23, 2017 (edited) 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 . Edited August 23, 2017 by njhorseman Link to comment Share on other sites More sharing options...
Sailor-man Posted August 23, 2017 Author #4 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
Charles4515 Posted August 23, 2017 #5 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
SRF Posted August 23, 2017 #6 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
njhorseman Posted August 23, 2017 #7 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
Sailor-man Posted August 23, 2017 Author #8 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
njhorseman Posted August 23, 2017 #9 Share Posted August 23, 2017 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. Link to comment Share on other sites More sharing options...
Rare voyager1964 Posted August 24, 2017 #10 Share Posted August 24, 2017 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" Link to comment Share on other sites More sharing options...
SRF Posted August 24, 2017 #11 Share Posted August 24, 2017 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. Link to comment Share on other sites More sharing options...
Sailor-man Posted August 24, 2017 Author #12 Share Posted August 24, 2017 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. Link to comment Share on other sites More sharing options...
scapel Posted September 5, 2017 #13 Share Posted September 5, 2017 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. Link to comment Share on other sites More sharing options...
Charles4515 Posted September 5, 2017 #14 Share Posted September 5, 2017 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! Link to comment Share on other sites More sharing options...
scapel Posted September 5, 2017 #15 Share Posted September 5, 2017 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. Link to comment Share on other sites More sharing options...
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