Everywhere we go
people wanna know
if we pay in euros
or convert to dollars
Actual cost on my credit card bill for these two charges, in USD:
$114.06 (left) $13.24 (right)
Conversion rates being offered by the credit card machine in Euros / 1 USD
0.891 (left) 0.893 (right)
Similarly while in Birmingham, UK for a trade show 2 days ago, I made a cash withdrawl at a British ATM. To the left is the picture of the screen. Wonderful - the nice people at the bank want to help me convert my cash!
people wanna know
if we pay in euros
or convert to dollars
Currency exchange seems a weird scam to me sometimes. If I have a hundred dollars and convert it to equivalent euros, it seems like if I converted those euros back to dollars, I should get back the same amount, but no. You lose a bit on each conversion. But I get that the middle men need to make their margins as well.
The scams that really get me are the ATMs and credit card terminals. They try really hard to convince you to use their automatic exchange rates, so you think they are doing you a favor.
To the right is the exchange rate for today in Euros - it should have been at about 0.92 Euros per USD for the two charges below. I wonder what happened at 2:30pm today that caused a 0.5% drop in the value of the euro.
$114.06 (left) $13.24 (right)
Conversion rates being offered by the credit card machine in Euros / 1 USD
0.891 (left) 0.893 (right)
Just about a 4% loss of your money by taking their "help" with conversion. The lesson here is that while the credit card providers seem to offer you assistance with a "conversion," they also are trying to scam you.
Similarly while in Birmingham, UK for a trade show 2 days ago, I made a cash withdrawl at a British ATM. To the left is the picture of the screen. Wonderful - the nice people at the bank want to help me convert my cash!
The ATM offered about 0.68 GBP/USD. The actual rate at the time was just under 0.78GBP/USD.
When we looked at the bank statement, only $65.77 was actually withdrawn at this transaction! This is an almost $8 / 11% savings, just by clicking a button. Of course, you almost feel you are doing something wrong by clicking "DECLINE CONVERSION". My uncle, when trying to take money out in Portugal came across this same screen and said he would have chosen the "ACCEPT CONVERSION" option, because it seemed like the accepted path. So my recommendation to you is that when anyone offers you a "free" conversion, remember:
DON'T TAKE THE DEAL!
ALWAYS PAY IN LOCAL CURRENCY!
For this money saving advice, we are always happy to receive a donation! :)
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