Last month I took a vacation to Ireland. It had been years since I’d traveled outside the US and Canada, so I did some “homework” before I left. One key step was to talk with my credit card carriers. Two purposes:
- Let them know I was going to be traveling (always a good idea, even when traveling in the U.S.).
- Find out what their currency conversion fees are.
When exchanging U.S. Dollars for another currency, there is always an exchange rate, because U.S. Dollars and Mexican Pesos and Euros and Indian Rupees are not equivalent. Currently, it takes about $1.10 US to buy one Euro, which is the currency used in Ireland.
Beyond that, however, there MAY be another cost: the bank that is converting the money may charge a fee for converting the funds. When I called my credit card companies, I got good news: two of my cards charged no conversion fees! My third card did charge a fee (3%), so I didn’t use it at all.
So far it sounds like I did a great job, right? But no – not completely. My mistake came in a situation I hadn’t anticipated. Sometimes when I was paying for a purchase in Ireland, the store gave me a choice: would I like to have the transaction charged to my credit card in US dollars or in Euros? A few times, caught by surprise, I said “US Dollars.”
Unfortunately, that was the wrong answer, as I learned when I looked closer at my receipts. Because when the store or restaurant ran the transaction in US Dollars, then they charged me a conversion fee (3.5% in one case). The right answer to the question would’ve been to have them go ahead and process the transaction as Euros, since I knew my credit card wasn’t going to charge me a fee.
Was this the end of the world? Absolutely not. It was a small expense, since I only did that a few times before I noticed the fee, and luckily not on any large purchases. But I was still a little disappointed in myself. After preparing to be a smart traveler, I undid the benefit by making a poorly-informed decision on the spot.
I’ll do better next time. And maybe YOU will have a chance to benefit from the lesson I learned!