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Local currency, always.
What ur talking about is called dynamic currency conversion (DCC) in the payments business. They do exactly what u say - they charge a spread above the true exchange rate in exchange for providing the "service" of doing the math for you on the spot. It's essentially a huge scam and is being made illegal in many areas around the globe.
Good question. Came across this a lot while in Europe. I didn’t catch on to it till a vendor was trying to force me to select the USD option. That’s when I did some quick mental math and figured I was getting screwed. Always choose the local option. And thanks SC1 for the technical terminology/explanation! I love fishbowl. Haha
Local currency. Always local currency. I live in the middle east and I've set up alerts to figure out the exact answer to this.
Chase does not charge a transaction fee and gives you the exact conversion rate the instant you use your card with no markups. Stores always tack on 1-3% to the price if you pay in USD.
People don't talk about it, but if you're abroad, the no fee forex conversions are part of the reason CSR is so great.
More fun technical tidbits. @booz1, the exchange rates when you swipe your card are actually set by the network (visa/MasterCard), not the issuer of the card (chase, bank of America, etc). So your CSR will get no better rates than any other visa card. As long as the card has no foreign transaction fee, all Visa cards will be equal in this regard.
Local currency. Your bank / credit card almost certainly gives you a better rate. Check for foreign transaction fees tho
Local currency. They will try to screw you and let you charge in USD and use a bad exchange rate
If you have a card with no forex (eg CSR or Amex SPG) local currency is the best option. You basically get the wholesale/WSJ rate.
Thanks all! I had a feeling that there was something strange going on when I did some quick mental math when presented with payment options.
As a heads up - third party ATMs abroad will also play the same game (markup on the forex and withdrawal fees). If possible use a bank affiliated ATM where you can withdraw in local currency (your bank should give you the market rate-a few bps)