Who determines exchange rate for credit card transactions?

Can anyone advise who decides the exchange rate when using credit card for paying for goods in foreign currency. I recently purchased flights with Ryanair in Danish Kroner and have just receive my visa card statement. It seems that the exchange rate is worse than the bank rate. I know it may only be a difference of 10 euro but I always thought that you got a better exchange rate when paying by Visa.

Re: Ryanair exchange rate

Builder said:

Can anyone advise who decides the exchange rate when using credit card for paying for goods in foreign currency.

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The credit card company determines the exchange rate (inclusive of some margin usually in the 1.75%-2% or more region) when converting the transaction to €.

I know it may only be a difference of 10 euro but I always thought that you got a better exchange rate when paying by Visa.

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Better than what? It is often better value than changing cash, or buying travellers' cheques etc.

When you're abroad you Visa will almost certainly be cheaper than taking money from an ATM. One thing we can be thankful for here is that it isn't common to charge a large fee at the ATM to customers of other banks.

One thing I did notice but I don't know for sure if I'm right about this. When you are abroad and paying by Visa you will sometimes be asked if you want to pay in Euro's or in the Local currency. I presume in this case the exchange rate is being set by the retailer or their bank, rather than your Visa card provider.

I always ask to pay in the Local currency and let Visa convert it because I know the price in Local Units, and I know Visa give an OK rate. Who knows what some hotel in London, or a shop in Singapore will give you as an exchange rate.

-Rd