Another Warning On Dynamic Currency Conversion

Carol Pucci at the Seattle Times has raised afresh some warnings about dynamic currency conversion. This is the practice, which I’ve mentioned before, of converting a purchase in a foreign currency into your home currency.

Sounds handy, but the fees are a total rip-off.

Pucci’s column also mentioned another pet peeve of mine, the AAA Visa TravelMoney prepaid card, which charges an outrageous 7 percent fee on foreign currency transactions. She reports that AAA will be getting a new vendor and that fee will drop to 3 percent in February.

Better. Still not great.


One thought on “Another Warning On Dynamic Currency Conversion

  1. Sumit

    Currency conversion is a topic of discussion for most international travel. When I first started doing it, I used to follow the lead of my veteran colleagues who knew exactly where to convert for the best returns. Some of my current practices are –
    Avoid exchanging money in US airports at the time of departure – esp. if you are going to ‘exotic’ countries. They charge ridiculous fees to exchange ‘exotic’ currencies as they don’t stock enough cash from that country. Almost everyone in the world loves the US dollar – you will get a better rate when you get to your port of entry in that country.
    Following the advice of Rick Steves, I have dropped carrying traveler’s checks (they were a hassle even in Europe if they are in US denomination). Instead, I used my ATM to withdraw cash at the airport on arrival. I know where the ATMs are located in most of my frequently visited airports 😉
    Use petty cash instead of credit card for small purchases – the fee assessed by credit cards always adds up. Plus, it reduces the chances of credit card fraud in a foreign country.
    Some countries such as Singapore, Korea are very good for converting US dollars – good rates + no service fee.
    Finally – follow the locals. In Narita, I saw most Japanese make a beeline for one counter while the shorter line had mostly non-Japanese. A slightly longer wait for a better conversion. Japan is a very cash driven economy and ATMs accepting US cards are not as common.


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