Attention Travelers About Dynamic Currency Conversion Risks

I’ve been aware of this issue for a long time, and my recent experience shows that even if you know the risks and think you are being careful, you can still fall victim to a scam.

Dynamic Currency Conversion is a scam where, when using a credit card in another country, they offer to convert your charges to your home currency for you. This situation mainly affects MASTERCARD and VISA and does not apply to DISCOVER or AMEX.

So just yesterday, I was dining at a restaurant in Brazil that did not accept AMEX or DISCOVER. I pulled out my BILT MC and asked the server to process the payment in BRASILIAN REAIS. Unfortunately, she seemed inexperienced with this process and ended up converting it to dollars with an additional 12% fee.

I tried to get them to reverse the transaction, but they seemed lost about what had happened. To make things worse, the receipt stated: “DYNAMIC CURRENCY CONVERSION IS OFFERED BY REDE. I HAVE BEEN OFFERED A CHOICE AND AGREED TO PAY IN USD.”

I’ve filed a fraud complaint with Wells Fargo, and I’m waiting to see what happens. I want to warn anyone traveling to make sure that servers do not hit the conversion button at the register. They often won’t understand your request clearly.

VISA and MASTERCARD should prevent banks from adding this unnecessary service. Charging a 12% fee is outrageous when I know there are no credit cards that charge such a high foreign exchange rate, and BILT charges nothing for this service. It makes no sense for me to pay that extra charge for something Wells Fargo does for free.

I really dislike this scam. They should just let customers handle the payment directly and choose if they want the conversion.

Franklin said:
I really dislike this scam. They should just let customers handle the payment directly and choose if they want the conversion.

Exactly! I should have taken the machine from the server. Just telling them to use the local currency wasn’t enough. I’m mostly upset with MC and VISA. They need to put a stop to this scam.

@Zem
When I’m in Brazil, I usually tell them to wait at the last step so I can see what they are selecting.

I’m in Portugal right now. They always process payments in euros and I decline the conversion.

Mary said:
I’m in Portugal right now. They always process payments in euros and I decline the conversion.

This isn’t about the original post, but how have credit card payments been accepted in Portugal?

@Terry
I’ve been able to use my Apple Watch to pay at almost all places in Portugal.

Wynne said:
@Terry
I’ve been able to use my Apple Watch to pay at almost all places in Portugal.

Did they bring the card reader to your table so you could use Apple Pay?

Terry said:

Wynne said:
@Terry
I’ve been able to use my Apple Watch to pay at almost all places in Portugal.

Did they bring the card reader to your table so you could use Apple Pay?

Yes, they did.

Wynne said:
@Terry
I’ve been able to use my Apple Watch to pay at almost all places in Portugal.

Does using Apple Pay prevent these issues? If so, that would be a great solution.

Zem said:

Wynne said:
@Terry
I’ve been able to use my Apple Watch to pay at almost all places in Portugal.

Does using Apple Pay prevent these issues? If so, that would be a great solution.

No, most payment terminals still ask for the currency choice, local or USD.

@Wynne
Ugh! It never ends. Why would anyone choose to pay in their home currency when no bank charges that much for a currency exchange? At most, it is around 3%.

Zem said:
@Wynne
Ugh! It never ends. Why would anyone choose to pay in their home currency when no bank charges that much for a currency exchange? At most, it is around 3%.

Back when DCC fees were much lower, it might have made sense in some cases.

Zem said:
@Wynne
Ugh! It never ends. Why would anyone choose to pay in their home currency when no bank charges that much for a currency exchange? At most, it is around 3%.

Unsuspecting customers are easy targets. The establishment and credit card processor likely get a kickback from those extra fees, so they want to trick customers.

@Terry
Almost every business in Portugal accepts credit cards and offers contactless payment. They are advanced in this area compared to the US.

@Terry
I was in Europe a month ago. I took out cash the first day and ended up trying to use it at the end of my trip, since everywhere had contactless payment. The currency conversion question only came up a few times, mostly at hotels or nicer restaurants. Most places didn’t even ask.

@Terry
It’s almost universal. I was in Madeira for a week and didn’t use any cash. Here in Albufeira, some places don’t allow you to add a tip to your bill, so we did need some cash. It’s always smart to keep some euros on hand.

@Mary
That’s because tipping isn’t common in Portugal. Let’s stop spreading this American style of tipping.

@Mary
Awesome, thanks for sharing your experience!

Oh, that server had processed that kind of transaction many times before.