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Avoiding being overcharged on your credit card

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There was an article in the "New York Times" today (10/24/19) that discussed how to avoid being overcharged when using your credit cards overseas.


While the article focused a bit on India, the trick is common outside the U.S.  Hotels, restaurants and others, though hotels and restaurants are prime "perpetrators" of a trick where they tell you that they will charge you (a U.S. citizen, but likely similarly for Canadian citizens, and potentially any other nationality) in U.S. dollars rather than the local currency.  They might tell you that they are doing you a favor.  In reality, they are overcharging you since they will charge anywhere from 3 - 8% more for the exchange than you would have paid if they had charged you in their local currency.  Visa and Mastercharge will do the conversion automatically when posting the item to your account using wholesale exchange rates rather than the inflated rates you will be charged if you ask a foreign hotel, restaurant or store to charge you in U.S. currency.


According to Visa and Mastercharge rules, they are required to ask you if you want to be charged in your home currency, and give you the option, but many are attempting to do it automatically.  They might be correct that the machine they are using does it automatically, but if you demand the right to charge in local currency, they will be able to do it though sometimes they will have to use a different machine that is not programmed to charge you in your home currency.  You do have the right to be charged in local currency.  Foreign banks and third-party processors are sometimes part of the "scam" and share in the extra charges with the establishment where you ran  your card.


Amex users do not have this concern, as Amex charges are automatically done in local currency and converted by Amex.

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  • 2 months later...

This is getting more common in the FLL and MIA areas.   We are never asked if we want to be charged in Canadian dollars, always 'do you want to be charged in your home currency (or currency).   Princess cruises at one point were terrible about doing this EVEN if you ticked the box to be charged in local currency.  We would have to go down to the desk near the end of the cruise and double check that the ship was not charging us in Canadian dollars.


We also use a credit card that does not tack on the usual uplift of 2.5-3 percent to the currency conversion rate.

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