I often use my US-based BofA credit card for purchases, and on certain POS systems (J-Mups, I think?) you get the option to pick the transaction to be completed in USD or JPY. This usually confuses the heck out of the cashier, they panick and call another employee over etc etc.
That aside, with the exchange rate being 1 USD = 140ish JPY right now what is the difference and what is better to choose? I figure I can look up my CC’s exchange rate, but I’m a bit iffy on how / when the conversions happen or whose rates are used. Do I need to pull out a scatch pad and financial calculator at the register to figure things out properly?
3 comments
When you purchase in USD, the domestic vendor will use a (generally shitty + some markup) rate to convert Yen to USD and bill your card in USD.
When you purchas in yen, the card is billed in JPY, and then your bank (BofA) will use a maybe not-so-shitty rate to convert and may or may not add a “currency conversion fee” on the transaction.
Your concern should be which of the following 2 is less:
1) shitty rate + markup from domestic vendor (purchase as USD)
2) OK rate but currency conversion fee (purchase as JPY)
And nobody here would answer that other than your bank and/or expeirmenation.
Since a random vendor isn’t going to publish their rates/markup, option (2) might be safest, especially if BofA doesn’t have a currency conversion surcharge.
You should see if your credit card charges international currency conversion fees. If it does, the rate you get from choosing JPY, will be offset by the currency conversion fees added by your bank (between 1 and 3%). If the card doesn’t have currency conversion fess, then JPY is the best way to go.
As a rule of thumb, use the currency of the country you’re in. In general, your card issuer has more transparent rates and fees than the shady intransparent conversation of the vendor or ATM operator. I think it’s made to trick unaware travellers, serious vendors and chain stores don’t seem to offer any currency selection.