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Going on holiday abroad, we often wonder to AK more profitable to pay abroad. To open the currency account or to go with the ruble card? Is it worth to withdraw cash from local ATMs? Which currency to choose, if the store offer to calculate the amount of the purchase immediately in rubles? Will explain how to pay abroad to avoid extra charges.
will Look for a start how goes cashless payment. When you pay for the purchase with the card abroad, the terminal in the store sends a request to a local Bank that it serves. Next, the request is forwarded to the payment system (Visa, Mastercard or others). That, in turn, drawn into your Russian Bank. The financial institution verifies whether the necessary amount in your account and blocks it. The payment system sends this information to a foreign Bank, which confirms the cancellation. In the end, the terminal carries out the operation and prints you a receipt.
How will the conversion and how much you pay for it, depends on what currency your account is in which you buy the item (transaction currency), and what your Bank is calculated with the payment system (the billing currency). If one of the three different currency, the conversion happens once. If the process involves three different currency, funds are converted twice. And with every conversion you lose money.
let us Consider different scenarios.
the world with ruble card
Say you're in the Eurozone and pay in stores ruble card. If your Bank is calculated with the payment system in roubles, the amount of the purchase from euros to Russian rubles converts the payment system on its course. Your Bank can add up to 3% Commission for cross-border payment. If the Bank is calculated with the payment system in Euro, the conversion holds the credit institution itself for its internal exchange rate which may differ from the rate for operations with cash currency.
what if you were with the ruble card in a country where the currency is not the dollar and not the Euro? Suppose you are in Phuket and pay in Thai baht, and your Bank is calculated with the payment system in dollars. Then the payment system will transfer the purchase price from the national currency into dollars at their rate, then your Bank will conduct the conversion from dollars to rubles — on the. Get double conversion.
on a vacation with currency map
If you pay in Euro the Euro area card payment will be one-to-one. Even if your Bank is calculated with the payment system in dollars or rubles, a conversion will not pay — usually a credit institution takes such costs themselves.
But with "exotic" currencies with no conversion necessary. Say you're in the same Thailand, but with the dollar card, and your Bank with the payment system is calculated in dollars. Then you will be one conversion, and will hold its payment system will recalculate the amount of the purchase from Thai baht into dollars and will ask your Bank.
Insidious DCC, or How not to get a triple conversion
In some stores you may be asked to choose in which currency you want to pay in local or in Russian. It is an instant currency conversion, or DCC (Dynamic Currency Conversion), the service is convenient but treacherous. If you choose rubles, will go to triple conversion and a double Commission.
there it is. Thai supermarket you buy mangos and pay the ruble card. The seller offers you accounts, and you agree. First, for convenience in the form of DCC you will pay the Thai Bank fee. The local Bank still translate rubles into Thai baht for the course to request money from the payment system. The payment system converts the baht to dollars and charges a Commission for cross-border payment. Russian Bank receives a request in dollars and convert the amount into rubles. Thus, there is a triple conversion (ruble baht dollar — ruble) and will be charged double the Commission (for DCC and cross-border payment). In total, they will eat from 1.5% to 10% of the amount of money issued. Conclusion: if the seller offers to choose the currency of payment, always stop at the local.
it was Shot at the ATM pays twice
cash Withdrawal at ATM abroad loses a cashless payment. Currency conversion in this case occurs according to the same principles as when paying by card, you pay an additional fee. First, a percentage amount will retain a local Bank. Secondly, your Bank may charge you a fee for withdrawals in "foreign" ATM. Add to that limits on the amount you can withdraw at one time, and opting to pay by card will become obvious.
Ad units travel Tips Before you travel abroad, ask your Bank, the currency in which it makes payments with the payment system for card transactions in the country. Find out the size of the commissions when converting and withdrawing cash from a foreign ATM. Specify who pays the Commission for conversion, when match the transaction currency of account currency of the card. For travel in EU it's better to use a card linked to the Euro account in the US — dollar. This will allow to avoid losses in currency conversion. In countries with other currencies it is best to use the dollar card. In this case, the conversion will be only one: from a local currency into settlement currency payment system dollar. Try to withdraw money from ATMs to a minimum. Always pay for purchases in local currency. If offered the payment in rubles — don't settle. Choose special cards for travelers. According to him, banks can charge higher cashback and bonuses for payment for goods in the category "travel" (tickets, hotel reservation, etc.), and for any purchase abroad.
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