You may find one exception. Planet Payment claims that its dynamic conversion rates are as good as those you get through the more usual system. I haven't had a chance to check it out personally, but that's the claim. The problem, as I see it, is that you can't be sure which local merchants use that system as opposed to any others.

American Express or Diners Club

America Express operates a bit differently. AmEx acts as both issuing bank and international network, so there's no separation of fees. You pay about two percent, total, on overseas transactions.

Diners Club formerly operated the same way as AmEx, but the Diners Club card now seems to have devolved into a conventional Citibank MasterCard with a few special features.

What to do

Overall, I see far more risks and fewer benefits from using dynamic conversion than from getting your charges in local currency.

• Always ask for a charge in local currency.
• If you bill a lot of overseas spending on a credit card, get a card that doesn't add the surcharge.

Otherwise, two percent of your foreign purchases is a pretty small number of dollars. Use your regular card and concentrate other ways of cutting your travel costs by more than two percent.