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Dangers of Dynamic Currency Conversion for Travelers in Europe

This scheme allows foreign credit card terminals to offer payment in the traveler's home currency, often resulting in inflated costs due to unfavorable exchange rates and hidden fees.
Cover Image Source: Currency Exchange Scams | Photo by rdne-stock-project | Pexels
Cover Image Source: Currency Exchange Scams | Photo by rdne-stock-project | Pexels

An experienced travel advisor recently cautioned  Americans heading to Europe regarding the use of credit card currency exchange programs. Brian Kelly, founder of The Points Guy travel website, highlighted the potential pitfalls of a program known as "Dynamic Currency Conversion" (DCC), which could inflate expenses for travelers.

Image Source: Photo by Andrea Piacquadio | Pexels
Image Source: Photo by Andrea Piacquadio | Pexels

DCC occurs when foreign credit card terminals offer users the option to pay in their home currency or US dollars instead of the local currency, typically euros. However, merchants often tack on a surcharge rather than providing a fair exchange rate, leading to increased costs for travelers. Additionally, the pressure to make quick decisions in unfamiliar environments can result in unwittingly accepting unfavorable exchange terms.

"During my recent trip to Europe, I noticed that wherever I went, I was given the choice to pay in US dollars," said Kelly. He was presented with the option to pay in US dollars for a charge of 384 Euros, which amounted to $437. Opting to pay in euros using his US credit card instead, he only incurred a charge of $416.

This example underscores the potential savings lost by opting for DCC. Kelly recommends consulting reliable exchange rate sources like for accurate information.

Image Source: Photo by Jack Sparrow  | Pexels
Image Source: Photo by Jack Sparrow | Pexels

Amid widespread confusion among travelers, Kelly emphasized the importance of choosing to transact in the local currency and entrusting the conversion to one's bank. Even ATMs, which prominently display amounts in both the local currency and US dollars, are designed to encourage DCC adoption, further complicating matters.

"I know a lot of travelers who are confused by this. They are quite keen to accept your payment. Therefore, being aware and cautious is important, choose to charge in the local currency, and delegate the transaction to your bank," he said.

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According to the ECO, when paying in the local currency, the cardholder's bank automatically handles the conversion rate. However, when opting for DCC, the merchant's service provider handles the conversion, likely including a subtle fee. 

Concerns over DCC extend beyond individual travelers. The European Consumer Organization (ECO) has labeled the practice as fraudulent, warning that customers often end up paying more when opting for DCC due to inflated exchange rates. "Most of the time, customers wind up paying more just to see the price in their home currency," the ECO stated.

Visa has echoed these sentiments, cautioning customers to decline DCC offers and report incidents to their card issuer if they feel pressured or lack necessary information. "If you don't see the necessary details or feel pressured to choose one currency over the other, Visa recommends that you decline the currency conversion offer and report the incident to your card issuer," the company stated.

"Deciding to accept or decline DCC won't affect your ability to make purchases or withdraw cash internationally," Visa assured.