My last post got me thinking about other financial issues faced by travelers overseas. The option to be charged in U.S. Dollars is a popular one.
I am sure you have been asked at either restaurants or retailers (especially in tourist traps) whether you would like to pay in U.S. Dollars or Euros. You may think paying in U.S. Dollars via your debit/credit card (if it works) is a great idea, but it is not.
If you opt for dynamic conversion into U.S. Dollars, you end up paying a larger exchange rate than you would normally pay and you will be charged a separate 3% plus currency conversion fee by the merchant on top of your bank’s usual transaction (read: conversion) fees. You are basically paying to convert your purchase twice.
It is a benefit to the merchant, not to you!