Euros or Dollars?
The wrong choice could cost you

by Catherine Hamm / © 2022, Los Angeles Times. Distributed by Tribune Content Agency, LLC.



Q: On trips to Italy and Spain last year, a hotel in each country asked me whether I would like my bill charged in dollars or euros. I had not been to Europe for a while, and I had never been asked this. Does it matter which currency I choose? Do I have to know what the rate of exchange is for that day to give an intelligent answer? I have a credit card with no foreign transaction fees. Would it matter if I did not?

—Julie, Manhattan Beach, California


  A: [Julie]—and millions of others—has stumbled onto one of the newer ways to part tourists from their money. And it’s mostly legal.

  The practice is called “dynamic currency conversion.”

  It works this way: You go to pay your dinner check in, say, France. The merchant asks whether you would like to pay in euros or dollars. “How thoughtful,” you think, “Someone is trying to help me overcome my conversion aversion and tell me in U.S. dollars how much I owe.”

  The merchant isn’t helping you overcome your math problem; he’s helping himself to a few of your dollars. He’s banking on the fact that you don’t know what the exchange rate is. If you did, you would see that the dollar exchange rate you’re getting probably is lousy.

  The merchant is supposed to ask you whether you want this conversion done; sometimes he doesn’t, which is contrary to rules that are almost impossible to enforce because there are so many points of sale.

  The answer to [Julie’s] first question—does it matter which currency I choose?—is yes. The currency you should choose when you’re in a foreign country generally is the currency of the country you’re visiting.

  The answer to [Julie’s] second question—do I have to know what the rate of exchange is for that day to give an intelligent answer?—is no. All you must know is that if you choose U.S. dollars, you’re probably going to get hosed.


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