Credit Card- Pay in Euros or GBP

Boardz Fiend

Hi, probably a very basic question but when I use my Credit Card in the UK i am asked if I would like to pay in Euros or GBP. Can anyone explain to me which i should choose and why?
Who gives the conversion rate in each instance and how do i know which is better.

Spocker

Thats a good question; when the shop vendor offer you the option of paying in Euros (your currency) or GBP (their currency) heres what they are really offering:

Pay in GBP - pay in the local currency and let your credit card provider do the conversion, at their published rate + a currency fee (AIB charge 1.75%)
Pay in Euro - allow the shop/vendor to do the currency conversion, and charge you the Euro amount. This is usually at a worse rate (for you) than the banks rate+currency fee.

So the advice is - always pay in the local currency, as your banks rates are usually better. If you frequently transact in non-Euro currencies, have a loot at getting a Revolut card, for even better rates

Delta2113

Avoid 'dynamic currency conversion' known as 'DCC'

When paying for things or withdrawing money, many providers will ask whether or not you wish to pay in your local home currency rather than the local currency. Note that this will often be more expensive and give you a rate that may be worse than had you of used the local currency. Always choose to pay in local currency to avoid extra foreign exchange margins and the 'dynamic currency conversion' process.

Boardz Fiend

Spocker wrote: »

Thats a good question; when the shop vendor offer you the option of paying in Euros (your currency) or GBP (their currency) heres what they are really offering:

Pay in GBP - pay in the local currency and let your credit card provider do the conversion, at their published rate + a currency fee (AIB charge 1.75%)
Pay in Euro - allow the shop/vendor to do the currency conversion, and charge you the Euro amount. This is usually at a worse rate (for you) than the banks rate+currency fee.

So the advice is - always pay in the local currency, as your banks rates are usually better. If you frequently transact in non-Euro currencies, have a loot at getting a Revolut card, for even better rates

Delta2113 wrote: »

Avoid 'dynamic currency conversion' known as 'DCC'

When paying for things or withdrawing money, many providers will ask whether or not you wish to pay in your local home currency rather than the local currency. Note that this will often be more expensive and give you a rate that may be worse than had you of used the local currency. Always choose to pay in local currency to avoid extra foreign exchange margins and the 'dynamic currency conversion' process.

Thank you guys, thats exactly what im looking for :-) Makes sense

coylemj

+1 to the advice above. On a few occasions in the past I made a note of the EUR amount Amazon UK was offering at check-out time but I declined and paid in GBP. When I checked my credit card bill, it was always less than Amazon's number so the moral of the story is that if even Amazon can't beat the bank's rate, always pay in the vendor's currency and let Visa or Mastercard do the conversion.

Mrs OBumble

I use a foreign currency credit card quite often in Ireland and have got into the habit of saying "if it asks, put it through in Euro please" when I hand the card over. Lots of shop staff think they're being helpful by choosing the card's currency without asking. Either that or greedy bosses have trained them to do it that way.

coylemj

Mrs OBumble wrote: »

I use a foreign currency credit card quite often in Ireland and have got into the habit of saying "if it asks, put it through in Euro please" when I hand the card over. Lots of shop staff think they're being helpful by choosing the card's currency without asking. Either that or greedy bosses have trained them to do it that way.

+1 The latter I'd say, most retail staff are trained to operate in a specific way and innovation is discouraged so anything they do, they are trained to do.

Hotels in the UK are in the habit of trying it on as well, it started a couple of years ago in a place I go to frequently so after I've given my name at the desk, I tell them in no uncertain terms that I expect to be billed in sterling. It's a relatively new way to boost profits - screw tourists with a sh1te FX rate.

Yggr of Asgard

There are several providers out there that provide the shop with a kickback % of the charge if DCC is used which the shop uses to offset the cost of the credit card acceptance. Which is why the shops push DCC on you.

As to Amazon, using their rate has an advantage if you ever need to get a refund because the refund will be provided for the same € you paid and not the equivalent £ converted to €. But if you are unlikely to return something than you should use £ or revolut. But if it's electronic goods it sometimes pays to have paid more by using Amazon's € option because you will get all your money back not just part. And with the £ going where it's going that might be helpful.