Pay in local currency or in dollars with a credit card in Peru? [duplicate]

Until now, I've only seen credit card charges displayed on the POS terminal under a country's own currency.

However, in Peru, many terminals display both the local soles and my card's usual currency, Canadian Dollars and the vendor asks me which currency I would prefer to pay in, which I can pick.

Now, until this trip, I had come to expect that credit card companies will profit handsomely at my expense by extra charges and perhaps a less than ideal exchange rate. I assume this is still the case.

My question in this case is, will those charges, and the final cost to me, be less if I pay in local soles or if I pay in CAD $? Are the displayed CAD/Soles amount, and therefore an implicit exchange rate, telling me the whole story? Assume, if you're not sure about CAD $ specifics, that the choice is between USD $ or soles. Also fine if you have experience with a similar system of currency payment choices in a country other than Peru, I assume credit cards operate relatively similarly across countries. But I am really looking for people who went through it and did the math upon their return.

In other words - better to pay in soles / better to pay in dollars / about the same?

Note: the vendor is not the one offering me a choice between say 70 soles or 25 CAD and therefore setting the exchange rate, at that point they don't even know where I come from. Its the VISA terminal itself that recognizes my card. So, whatever the merits or not of paying in local currency, that is NOT driven by the vendor's choice of exchange rate (which, yes, I would assume would be worse than VISA's).

Best Answer

I've never, ever seen a payment terminal that gave you a better exchange rate than your home bank. Worst I've seen in a bank is a 3.0% spread compared to the central bank's rate, while the terminals will give you 5% on a good day. So always decline paying in your home currency and pay in the local currency instead.

Dynamic currency conversion (DCC) is a massive worldwide scam that's just waiting to be banned or regulated by the financial authorities. Avoid it like the plague.

Pictures about "Pay in local currency or in dollars with a credit card in Peru? [duplicate]"

Pay in local currency or in dollars with a credit card in Peru? [duplicate] - Person Holding Debit Card

Pay in local currency or in dollars with a credit card in Peru? [duplicate] - 100 U.s. Dollar Banknotes

Pay in local currency or in dollars with a credit card in Peru? [duplicate] - Close-up Photography Two Brown Cards

Should I pay in card currency or original currency?

Typically you are better off opting to pay in the local currency, rather than converting to Sterling as you make the purchase. If you pay using the local currency, the transaction will then be converted into Sterling at the Mastercard, Visa or Amex own rate.

Do American credit cards work in Peru?

VISA and MASTERCARD are most widely accepted. AMEX is accepted more frequently now, but mainly in the luxury hotels and upscale restuarants.

Can I use my credit card to buy something in a different currency?

Yes, you can use a credit card to withdraw foreign currency. However, it's generally a bad idea as your card issuer will charge significant fees for doing so.

Is USD used in Peru?

Who Accepts U.S. Dollars in Peru. Many businesses in Peru do accept U.S. dollars, especially within the tourism industry. Most hostels and hotels, restaurants, and tour agencies will happily take your dollars (some even list their prices in U.S. dollars), while also accepting the local currency.

Should You Pay in Local or Home Currency?

More answers regarding pay in local currency or in dollars with a credit card in Peru? [duplicate]

Answer 2

The Visa exchange rate is pretty close to the market rate. If your bank doesn't screw you by adding a conversion fee (which is often undisclosed), then you should use local currency.

Otherwise, you should find out what your bank's fee is and how much the local bank's fee is. If my experience in Spain is any guide (a very big IF), the local bank's charge is worse, and some ATMs won't reveal what it was until after you receive the cash. And if your bank isn't entirely upfront, you have to make a transaction in local currency and then find out what your bank converted it to in your currency. For many banks, the exchange rate changes many times a day, but the Visa rate (which my bank uses) changes only once per day.

Answer 3

But I am really looking for people who went through it and did the math upon their return.

It depends on your debit/credit cards. As Danny mentions, typically it's financially preferable to use local currency with your credit card (I confirm it is also typically the case in Peru). If you don't want to do the math each time, you can use a card using currency exchange market rate and without international fee.

Sources: Stack Exchange - This article follows the attribution requirements of Stack Exchange and is licensed under CC BY-SA 3.0.

Images: energepic.com, Pixabay, Pixabay, Pixabay