In November, I wrote about Dynamic Currency Conversion (DCC) problems that I had with number of hotels in China. I continue seeing this practice with quite a few ATM machines as well where operators are trying to extract extra profits from travelers.
Here is an example from London Heathrow airport on Monday. I had a booking with an airport hotel and needed some cash for the cab or the bus. There are number of ATM’s all over the places that are praying for clueless tourists.
Again, the ATM shows that there is NO-COMMISSION in very large font and the exchange rate from pounds to euros. On the lower right, however, on a very small font is the admission that they charge 5.5% margin in top of the wholesale rate. If this “margin” is not a commission, what is it then?
Quit a few card companies have stopped charging for currency conversions altogether. These foreign currency transactions are processed through MasterCard and Visa networks at competitive rates. Some card issuers do charge for a foreign transaction fee regardless in what currency the transaction is made. So, even if you withdraw the money in your local currency after the DCC, your bank might still charge their fees.
My advice has always been to decline these automatic currency conversions unless you want the ATM operators to make quite a few extra bucks out of you.