What is dynamic currency conversion and how to avoid paying for it – Forbes Advisor


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Dynamic currency conversion allows consumers to choose to use their home currency when transacting with retailers, restaurants and other services in foreign countries. Customers see an invoice showing the cost in local currency, their home currency, and a proposed exchange rate if they charge their credit card in their home currency. It might seem like an attractive offer to know how much you’re charged without manually converting the local currency yourself, but you might end up paying more due to markups and hidden fees.

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What is Dynamic Currency Conversion?

Dynamic Currency Conversion (DCC), sometimes referred to as Cardholder Preferred Currency (CPC), allows customers to pay for a product or service in a foreign country using their national currency instead of the local currency. This involves a type of currency conversion fee similar to other fees that credit cards or ATM cards may charge to convert purchases or cash withdrawals in a foreign country into your home currency.

Currency conversion fees are usually charged by the debit or credit card processor, such as Visa or Mastercard, and are approximately 1% of the transaction amount. DCC is usually set by a merchant’s service provider who handles the exchange rate and any additional fees.

This may seem attractive when presented with a DCC opportunity in a foreign country, as it is convenient and removes the extra step of converting the transaction amount from local currency to your home currency yourself. But using DCC may result in a more expensive exchange than charging your credit card in the local currency of your travel destination.

Do I have to pay using dynamic currency conversion?

Whenever you buy something from a store or restaurant, you’ll probably want to see the best deal possible. By avoiding paying DCC fees and instead paying in a local currency, you can do this by saving money on DCC related fees.

You should always have the choice of currency in legitimate DCC transactions. An invoice must show the amount of the transaction in your national currency and your local currency, as well as the currency conversion rate that will be applied to your transaction if you choose to invoice the purchase using DCC.

For example, if you are a US citizen traveling to Paris, you might receive a tab showing €30, $32 and an exchange rate of 1 euro = 1.05315 US dollars (current rate as of August 2022; updated to EURO in USD). At first glance, DCC might look okay, but if you compare DCC to the current market rate that your credit card processor would charge in a few days, you’ll probably find that loading your card in euros is cheaper than using the DCC.

DCC has its advantages, but the disadvantages could quickly outweigh the advantages.

Benefits of Dynamic Currency Conversion

Paying DCC in a foreign country has a few advantages.

  • You will know what you are paying for up front. Instead of waiting to see the full cost of your local currency on a bank statement, you’ll know how much a product or service will cost at the point of sale and you won’t have to estimate what you’ll be charged after your issuer. executes the transaction and reports it.
  • It is optional; merchants need your consent. Stores, restaurants and other services are not permitted to conduct DCC transactions without consent. You can accept or decline DCC at any point of sale.
  • Price comparison is easier. DCC could make your shopping easier by allowing you to compare the prices of different products in your local currency without having to do the extra work of cost conversion yourself.
  • The exchange rate is guaranteed at the time of purchase. When you accept DCC, the exchange rate offered that day is guaranteed at the time of purchase. If you decline DCC, your credit card currency conversion may occur a few days later when the transaction is processed. If you choose to wait, the actual amount will depend on the market rate that day.

Disadvantages of Dynamic Currency Conversion

The drawbacks of DCC may be enough to convince you to decline the option when shopping, dining or transacting in another country.

  • There will most likely be additional charges. A service provider under contract with the merchant will generally process a DCC for any given transaction. The provider may charge its own fee plus a markup on top of the transaction cost.
  • Merchants are not always required to reveal additional fees. You may not know exactly how much more you’ll pay when you accept DCC, unless you calculate the costs yourself by comparing the market rate to the exchange rate provided by the merchant.
  • Your purchase could end up being more expensive. Due to the additional fees, the DCC exchange rate shown on a transaction receipt or at an ATM is usually lower than the market rate, resulting in a more expensive purchase.
  • You still have to pay transaction fees. If your credit or debit card charges foreign transaction fees, you will still have to pay these fees in addition to the fees associated with a DCC. These charges will apply even if your transaction is in US dollars, as you are still using the card in a foreign country.

How to Avoid Paying Dynamic Currency

Avoiding a DCC is easy – all you have to do is decline when offered the option at a store, restaurant or ATM in a foreign country. The DCC rejection will ensure that you don’t pay more than you absolutely have to.

A DCC should always be an option. If you have no choice, the merchant may not follow the rules set by the credit card processor and even the local government.

For example, if you withdraw money from an ATM, you should have the choice to accept or decline a conversion provided by a third-party service. Similar to a purchase, the ATM must indicate the requested withdrawal amount in local and national currency, as well as the conversion rate that will be applied if the DCC is accepted. We recommend that you refuse this type of conversion at an ATM in a foreign country. You should still be able to withdraw money, but your bank will handle the conversion at the current market rate. If you cannot withdraw cash without completing a DCC transaction, find another ATM.

Other ways to save money while traveling include using a credit card that doesn’t charge foreign transaction fees and using a currency converter app to make a quick money conversion before making a purchase.

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No credit card is the best option for every family, every purchase or every budget. We have selected the best credit cards so as to be the most useful for the greatest number of readers.


Knowing how much you’re paying in your local currency at the point of sale has its benefits, but you’ll often end up paying more than necessary due to low exchange rates and unclear fees often seen with dynamic currency conversion. Instead, load a credit card using local currency and using credit cards with no foreign transaction fees to stay within your budget while on the go. Use debit cards with no foreign transaction fees to withdraw cash, as cash advances are inadvisable and expensive.

Frequently Asked Questions (FAQ)

Do I have to pay using dynamic currency conversion?

We recommend that you reject the offer to charge a card using dynamic currency conversion. You might end up paying more for your purchase.

How can I avoid paying for dynamic currency conversion?

Simply decline the offer to charge your card or withdraw cash from an ATM using dynamic currency conversion. Instead, load the card in the local currency or decline conversion at an ATM and continue with the withdrawal.

Are there any benefits to paying with dynamic currency conversion?

With dynamic currency conversion, you’ll know in advance how much a good or service will cost in your home currency, making it easy to compare prices of different products. The exchange rate is locked in at the time of purchase – a bank will usually charge the market rate on the day the transaction is processed.


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