When you buy something overseas, merchants will ask whether you want to pay in local currency or your home currency. They usually offer this service, called Dynamic Currency Conversion or DCC, for a fee.
Some card issuers add their own charge on top of the network fee, while others absorb it entirely. NerdWallet compared exchange rates from Mastercard, Visa and Oanda. 카드깡 업체
Exchange Rates
Credit cards let you buy products and services overseas without having to worry about carrying large sums of cash. However, when you swipe your card to pay, it is converted into local currency by your network before charging it to your account. That conversion is done using the exchange rate the card network selects from customary industry sources on the business day prior to processing your transaction. These rates are generally based on a globally recognized floating rate,1 and both Visa and Mastercard offer calculators that show you the current exchange rates they use for your transactions.
In NerdWallet’s latest study of credit card exchange rates, MasterCard offered better rates than Visa on more than 70% of the 44 currencies we compared in our weekly comparisons from September 2015 to August 2016. But that doesn’t necessarily mean you’ll save money by using a MasterCard card instead of a Visa one.
The reason: exchange rates account for just a small portion of the revenue Visa and MasterCard generate from international transactions, which are typically processed through their SWIFT-based networks. Most of the networks’ revenues come from cross-border fees, charges that foreign merchants have to pay on each U.S. dollar charged to their cards, as well as a cut of any foreign transaction fees you pay on your card.
Historically, many credit cards embedded these fees within their exchange rates, raising the cost of international purchases for cardholders. But a 2006 court decision put the kibosh on that practice, and today’s credit cards generally don’t include these extra charges in their exchange rates. That’s good news for travelers who want to avoid having to calculate and budget for hidden fees when making international purchases.
Fees
You've probably paid to exchange cash for local currency at an airport kiosk or international ATM, but you may not be aware that you're making the same kind of exchange every time you use a credit card abroad. The fees associated with these transactions are typically much more than the cost of exchanging money at an official currency exchange rate, and they can add up quickly.
In addition to the fee charged by the card network (Visa, Mastercard or Discover) and the card issuer, you'll likely be hit with another charge called a currency conversion or exchange rate fee. This is usually about 1% and can show up as a separate line item on your credit card statement.
The card networks typically base their currency exchange rates on market conditions, so the resulting charges tend to be close to what you'd get when you swap cash for goods or services at a local price. However, the card networks don't control the prices of all products and services sold outside the U.S., and some merchants or payment processors may add their own markup. These are referred to as dynamic currency conversion fees and can sometimes be more than the card network conversion rate and card issuer's foreign transaction fee combined.
Some card issuers used to embed these fees within the foreign transaction rate, but a 2006 court ruling put the kibosh on that practice. Since then, most cards have been required to clearly disclose the rate they charge, so you'll be able to see the full cost of the transaction before you swipe your card.
If you're not sure whether your card has a foreign transaction fee, check the "Pricing and Terms" or "Rates and Fees" section of your cardholder agreement. You'll find the exact percentages for these charges listed in the Schumer box. Some cards, including those geared toward frequent travelers, don't charge any foreign transaction fees at all. If you're a traveler, it's worth investigating what these cards have to offer.
Convenience
Many credit card companies and merchants offer a service at the point of sale called dynamic currency conversion (DCC). The idea is that you can see the cost of a purchase in your home currency right away, instead of waiting to see how much it is in local currency on your credit card statement. However, this convenience comes at a cost. DCC usually applies a less favorable exchange rate and may also add other fees. These costs may be in addition to any foreign transaction fees your card issuer charges.
If you're considering purchasing something in a foreign currency with your credit card, it is best to let your card's network do the exchange, rather than allowing a merchant to process the transaction in DCC. Your card's network may use a blended exchange rate, which is calculated from a variety of sources, including wholesale currency markets and government-mandated rates. The network then makes this rate available to its issuing banks, who often adjust it further in your credit card bill.
Using your card at an ATM in a foreign country will often give you a good exchange rate. However, you'll still be charged fees by the card network, your bank and the ATM operator. This can add up quickly. If you're not sure what the exchange rate will be, try using an online currency calculator to check the rates before making a decision.
You can also avoid paying these fees by avoiding DCC purchases and using credit cards that don't charge a foreign transaction fee. In some cases, the best option is to make a cash purchase in a foreign currency, if the purchase price is known in advance.
When you use a credit card in a foreign country, the credit card company puts your spending into two categories: purchases and cash advances. A cash advance has a different interest rate than a purchase, and your card issuer can hit you with late fees, returned-check fees and over-the-limit fees, depending on the circumstances. A credit card issuer may also report your spending on your credit record.