Reading statements
Foreign currency charges: what the extra lines and fees mean
Why a purchase abroad can show up as two or three lines, what an exchange rate printed on a statement tells you, and how to avoid paying for the conversion twice.
Written for: Cardholders 3 min read Updated
A purchase in another currency rarely produces one tidy line. You might see the purchase, an exchange rate, and a separate fee, sometimes on different days. None of this means you were charged twice for the purchase, but it can mean you paid for the currency conversion twice. Here is how to read the lines, and the one choice at the till that costs travellers the most.
Why one purchase can make three lines
- The purchase, converted into your card's currency, often with the original amount and currency printed beside it.
- The rate, on some banks' statements, as a separate line or a note: something like
RATE: 0.07 (AED/EGP). - A fee from your bank, often a percentage of the converted amount, labelled "foreign transaction fee", "cross-border fee" or similar. Some banks fold it into the rate instead, and then there is no separate line.
BOOKING.COM AMSTERDAM NL EUR 212.00 RATE 4.3021
- BOOKING.COM
- Booking.com.
- AMSTERDAM NL
- Where the merchant takes payments, not where you stayed.
- EUR 212.00 RATE 4.3021
- The original amount and the rate your bank applied.
A fee even when the price was in your currency
Banks often charge their foreign or cross-border fee based on where the merchant's payment provider is located, not on the currency you saw. A website can show you prices in dirhams or pounds, charge you in dirhams or pounds, and still be processed abroad. Your bank then sees a cross-border payment and may add its fee. That is why some "local" online purchases come with a surprise fee line.
Dynamic currency conversion: say no
When you pay abroad, a card terminal or a checkout page may offer to charge you in your home currency instead of the local one. This is called dynamic currency conversion, or DCC. It sounds convenient: you see the exact amount in your own currency. The catch is the rate. The conversion is done by the merchant's side, at a rate they set, which is usually noticeably worse than your card network's rate. Your bank may still add its own foreign fee on top.
- At a terminal, choose to pay in the local currency.
- At a cash machine abroad, decline the "guaranteed conversion" and let your bank convert.
- Online, if a foreign shop offers prices in your currency, compare the total with the local-currency price and the rate your card would apply.
Card network rules generally require the merchant to offer you the choice and show the rate. If you were not offered a choice, mention it to your bank.
Why the amount changes after a few days
The pending amount in your app is an estimate made at the moment you paid. The final amount is converted when the merchant settles, often a day or more later, at that day's rate. Small differences are normal, in either direction. Refunds are converted again on the day they are processed, so a refund can be worth slightly more or less than what you paid.
Field note
On statements we read, foreign currency lines are where a good statement and a bad one differ most. Some banks print the original amount, currency and rate on the same line as the purchase; others put them on a separate line, or not at all. If you want to know what conversion cost you over a year, the ones that print everything make it a five-minute job.
Working out what conversion cost you
For each foreign purchase, compare the amount charged with the original amount at the published network rate for that day. The difference, plus any separate fee lines, is what the conversion cost. Doing this by hand for a year of statements is tedious. Our statement analyzer adds it up for you: what you spent in each currency, and what converting it cost.