Transactions in foreign currencies


abcd

When using a credit card to pay for goods or services it is likely you will be charged a foreign exchange fee which covers the charges for converting the currency and the costs of providing customers with access to a global service. Charges on foreign credit card transactions are always a percentage of the transaction value. Credit card exchange rates (which are based on the current wholesale exchange rates) are generally better than the tourist rate.

Check your statement, or with your card company for information on these rates. In addition to these charges if you withdraw cash using your credit card you may be charged a cash advance fee, as well as a fee for using a foreign cash machine. As at home, if you withdraw cash at a cash machine with your credit card you will be paying interest from the date of the withdrawal.

• Increasingly you will find you can pay by debit card abroad and you should be able to do so wherever you see the logo that appears on your card (e.g. Maestro or Visa). Although the currency conversion may well be at the same rate as you would get on your credit card, instead of paying a percentage of the transaction value you will be charged a flat rate for all transactions. You can check this rate in your terms and conditions or by contacting your bank. As with a credit card there may be additional charges if you use a cash machine and any fees for using a foreign cash machine can be checked in your bank’s terms and conditions.

• When paying on plastic abroad the retailer may offer you a choice either to pay in the local currency or have the transaction converted into your home currency there and then. If you decide to do this you should check the exchange rate being used by the retailer because it may not be as competitive as the rate offered by your card company. The shop should make you aware of this optional service – called “Dynamic Currency Conversion” – and if you choose to pay in sterling, the shop assistant should let you know the exchange rate they will use, including any commission charged.

• When using your credit or debit card abroad to make purchases or obtain cash in a foreign currency you will usually be charged a fee. Rates vary between different cards and it is worth checking which

Previous Article: Tips to avoid credit card fraudsters

abcd abc
Related Posts by Categories

No comments: