In the world of international travel, there are a number of things that can catch you off guard. One of those things is a practice called dynamic currency conversion (DCC). This is a service offered by some merchants to convert your payment from the local currency into your home currency, with the promise of convenience. However, DCC can actually be a scam, and it's important to be aware of the risks before you agree to it.

How DCC Works

When you make a payment with a credit card in a foreign country, the merchant will usually ask you how you want to be billed. You have the option of paying in the local currency, or you can agree to have your payment converted into your home currency. This is where DCC comes in.

With DCC, the merchant will use their own exchange rate to convert your payment into your home currency. This rate is often much worse than the rate you would get if you used a currency exchange kiosk or bank. In fact, DCC can be as much as 10% or more worse than the fair market exchange rate.

Why DCC Is a Scam

There are a few reasons why DCC is a scam. First, it's dishonest. Merchants are supposed to ask you if you want to use DCC before they process your payment. If they don't ask, they are violating your credit card's merchant agreement.

Second, DCC is often not transparent. Merchants often don't tell you the exchange rate they are using, and they may not even charge you a fee for using DCC. This can make it difficult to know how much you are paying.

Third, DCC can be risky. If you dispute a charge that was processed with DCC, you may have a hard time getting your money back. This is because the merchant can claim that you agreed to the exchange rate, even if you didn't.

How to Avoid DCC

The best way to avoid DCC is to always ask to pay in the local currency. This will ensure that you are getting the best possible exchange rate. If you are unsure whether or not a merchant is offering DCC, you can ask them to confirm the exchange rate before you make your payment.

What to Do If You're Charged with DCC

If you are charged with DCC without your consent, you can dispute the charge with your credit card company. You will need to provide proof that you did not agree to the exchange rate, such as a copy of your receipt.

In some cases, you may be able to get your money back. However, it can be a long and difficult process.

The Moral of the Story

The moral of the story is to always be aware of DCC and to avoid it whenever possible. If you are charged with DCC without your consent, dispute the charge with your credit card company.

Additional Tips

• If you are going to use a credit card overseas, make sure you have a travel insurance policy that covers theft and fraud.
• Use a credit card that does not charge foreign transaction fees.
• Keep receipts for all of your purchases, so you have proof of what you paid and the exchange rate that was used.
• Be aware of the exchange rate before you make a purchase. You can find exchange rates online or at currency exchange kiosks.
• If you are unsure whether or not a merchant is offering DCC, ask them to confirm the exchange rate before you make your payment.