Credit card double whammy

On at least two occasions in Europe, when I used a MasterCard to buy souvenirs in a town busy with American tourists, the charge slip that I was given to sign for the purchase of an item priced in euros had language at the bottom stating that the purchaser agreed to have the charge made in US dollars instead, with the conversion to dollars made at a very unfavorable exchange rate.

Although this information was printed in English, it was in the space that, on charge slips at home, is usually taken up by advertising, so buyers often just sign these forms without reading that text. That’s what I did in Assisi, Italy, on Oct. 8, 2010, when purchasing an item priced at €29.50.

Only later did I notice what was actually written on the slip: “You have the choice of paying your bill in either: (Transaction currency) USD 42.45 or EUR 29.50. Exchange rate 1 EUR = 1.439 USD based on the VIC wholesale rate as at the transaction date. Mark-up on the exchange rate: maximum 3.5%. Please choose by crossing the transaction currency you wish to be billed in: USD/EURO. I certify I was offered the option of paying in a choice of currencies. I have chosen the above transaction currency and I understand this choice is final.”

When I later looked at my receipt, I realized that by not marking my choice, I could be charged in dollars at the unfavorable rate. Upon receiving my credit card statement, I was pleased to note that the merchant had posted the charge in the original euro price for the item.

In another instance, in Madrid, Spain, in September ’07, the charge slip merely disclosed the dollar amount to be charged and included a statement indicating that by signing the slip, I agreed to be charged in dollars instead of the euro amount at which the item was priced. The exchange rate was exorbitant. After the Madrid incident, I should have learned to be more careful of what I was signing, but I was in a hurry in Assisi.

Since many credit cards used abroad incur a Foreign Transaction Fee of 2%-3% even if the charge is in US dollars (exception — when I use my American Express card, I am not charged the fee for foreign charges made in dollars), this kind of unfavorable conversion by the merchant results in a double-whammy to the shopper abroad.

BRUCE BERGER
Mountain View, CA