Option for paying in Australian Dollars rather than local currency when travelling overseas

On our recent trip to Europe, we noticed for the first time that retailers/service providers in countries give an option to pay in AUDs at the time of a credit/debit card purchase/cash withdrawal.

This occurred on our recent visits to Switzerland and Dubai (stopover).

When one is about to finalise the purchase, there is an option to pay in either the local currency or using AUDs (the eftpos machines recognise the country of origin of the card and offers payment in the country or origin currency).

I initially thought, this is great, one way to potentially avoid credit/debit card fees associated with a foreign currency purchases/cash withdrawal and also assumed that the exchange rate would be that at the time of the purchase…noting that the point of sale, there was no mention of discounted exchange rates or fees by the local bank.

In Switzerland, I decided to remember the AUD cost see if making a purchase in AUDs when travelling overseas was good option to reduce costs.

Well, it isn’t as good as it seems. The cost to make the transaction in AUDs cost around 2% when considering the discounted (lower) exchange rates used (when compared to that of Visa on the same day). We are fortunate to have a no-fee foreign transaction credit card (28 Degree) when travelling so paying in AUD could have resulted in a 2% surcharge on the purchase which would not have otherwise existed using the local currency.

This is something to be aware of when travelling as I expect that this option will become more available in the future. The only time it may stack up is if your credit card provider charges fees greater than the discounted exchange rate used for AUD payment (either for a purchase or cash withdrawal). The difficulty is one would not know what the ‘fee’/‘charges’ are at the point of sale and possibly would assume, like we initially did, paying in AUD would be the better option.

I suspect that this is potentially new way for credit card companies to charge indirect fees for their service.


You don’t remember? :laughing: We have been over this rip off technique.

I thought to add this to the older thread, but this title makes it more focused. Always good to keep reminding people of the many ingenious ways there are to get our dollars.