An even more dynamic DCC: You still get screwed

We all (should) know by now that Dynamic Currency Conversion (DCC) is a scam. The payment processor does you the “service” of displaying a converted rate for your purchase on the screen while the consumer typically pays 3.5% for that luxury. During my recent trip to London I, of course, was presented with the DCC option several times. Thanks to the European style of CC processing, where the customer handles the terminal, I got to see the extra confirmation prompt that I was really declining the fee (there is no extra prompt confirming that you want to pay if you hit the wrong button). I also got to see just how dynamic the pricing is.

Different conversion rates just a minute apart. That's not really the way it is supposed to work. Just another example of Dynamic Currency Conversion (DCC) screwing consumers.
Different conversion rates just a minute apart. That’s not really the way it is supposed to work. Just another example of Dynamic Currency Conversion (DCC) screwing consumers.

While picking up lunch one afternoon I actually hit the USD button instead of the GBP button. I know, amateur move. But because it is chip+signature I managed to pull the card out before the transaction completed and void the sale. When the clerk ran the payment the second time I chose correctly. But I also got to see the quoted conversion rate twice. And it changed.

While the credit card company generally has a single daily rate for conversions it seems that the payment processor is more flexible in the numbers. The 0.7% swing is also pretty steep for two swipes a minute apart, especially when the real world USD:GBP conversion rate is far more stable than that, disastrous election result days not withstanding.

Even more interesting in this case is that the “base” exchange rate that the DCC fee gets added to is not the same rate that Visa ultimately used to complete the transaction. For transactions on Friday the official Visa rate was 1 GBP = 1.311769 USD. The transaction posted to my account at 1.311667 based on rounding the last penny. The two rates quoted, with the 3.5% DCC fee backed out, are 1.330099 and 1.335699. In this case the DCC transaction was a double dip in terms of just how badly they wanted to screw consumers. The 3.5% DCC fee ended up above 5% with the bad starting conversion rate.

The nominal Visa rate was pretty good that day, well better than even the base rate the DCC markup was applied to.
The nominal Visa rate was pretty good that day, well better than even the base rate the DCC markup was applied to.

Also, while MasterCard typically is known to offer a better conversion rate than Visa that was not the case on this particular day and with these currencies. Had I used my Barclay’s Arrival+ card (the main MC-issued one I carry) the rate would’ve been worse than the Chase Sapphire Reserve Visa I did use.

The nominal MasterCard rate was worse than Visa on this particular day; that's usually not the case per most reports.
The nominal MasterCard rate was worse than Visa on this particular day; that’s usually not the case per most reports.

Moral of the story: DCC is still a scam (except when it isn’t) and probably an even more variable scam than I’d previously considered.


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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.


  1. Checking out of a hotel in Cairo a few years back, they quoted me the balance due in USD. I said, “What is it in Egyptian pounds?” They said sorry, everyone with a U.S. credit card pays in dollars. I said maybe everyone else, but not me. After some more discussion, somehow they were able to charge me in pounds – imagine that. I don’t know this part for sure, but it seemed to me as though someone had been “incentivized” to not even present the choice.

    1. I think they strongly preferred USD in that case because Egyptian pounds are subject to crippling capital controls and the government’s rate is set artificially vs the actual worth of the currency. They may have had a separate merchant account and banking account set up for foreign clients.

  2. Great article and interesting to see the actual rate differences. But you might want to further clarify the difference between a DCC and non-DCC transaction. Maybe start with an example? As in: you’re American citizen sitting in a French cafe and you hand the waiter a U.S. credit card….

    1. Fair point, Robert.

      Short version is ALWAYS pay in the local currency for the country where the merchant/store is located. There is at least one exception I know of but it is only one and I’m not even sure there is a good opportunity for others to exist.

  3. Got charged in Seville at a museum in USD and was presented absolutely no option as no terminal was handed over. Handed CC over through window at ticket counter and got ripped off.

    1. Interesting as I had very few issues my last trip to France. Really comes down to the merchant and the person working the terminal, I think.

    2. I just got back today from a week in Madrid and the surrounding areas, and was presented the choice to pay in euros every single transaction.

    3. Just spent 3 weeks in Spain in August 2017. Was almost always given the choice to opt out. Once the cashier didn’t notice that the display choice was USD but I just pointed and said, “No. Euros” (I don’t speak Spanish) and she hit the correct choice.

  4. I’m not familiar with DCC, but it seems it would be advantageous to pay for everything in local currency. But does this also apply to international hotel chains like Hilton and IHG? Also, I frequently buy opera, ballet, and symphony tickets online before I make my trip. I’ve never noticed DCC or Exchange Rate Markup on the receipt, but that may well be because I’m not paying attention. What do you think?

    1. It definitely applies to hotels, even the big chains. They will bill you in the local currency (assuming you avoid the DCC scam) and that translates into a lower overall price to you.

      For other vendors if they’re charging you in a currency other than the local one you’re probably getting screwed somewhere along the way. Not all offer it or force it but when they do it is something you want to avoid.

  5. I got screwed by a shopkeeper in Jerusalem back in 2009 the same way. He quoted the price in Shekels but charged to the card in USD. Not a good exchange rate, either. This isn’t a new scam.

  6. Cambodia was the one that annoyed me the most. Cambodia uses the USD as the preferred currency. So all the hotel prices were quoted in USD, before the trip. We even paid for almost everything with USD. The hotel was put on the Chase Sapphire Reserve. I don’t think I was ever given any option of any currency other than USD. I thought that prices in Cambodia versus Vietnam were much higher, because everything in Cambodia is priced in USD. If you bought a Coke Zero in Cambodia it was $2, but in Vietnam in a similar convenience store, a Coke Zero was $.50. In Vietnam, I only had 1 instance of the DCC being presented and I forced them to change it to VDG.

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