[Gi Ha-yeong's Life Card] For Overseas Direct Purchase, Pay in 'Local Currency' Instead of Won

When Paying in KRW, an Additional 5-10% Fee Applies
Check Automatic Setting for Overseas KRW Payment (DCC)
Apply for Card Company DCC Blocking Service

[Asia Economy Reporter Ki Ha-young]Is there anyone these days without at least one credit card? In modern society, anyone can have a card if they want. Credit cards have brought unparalleled convenience to daily life. Now, wherever you go, you can easily see people paying with credit cards or smartphones. As demand has increased, cards with various benefits are being released almost daily. Accordingly, Asia Economy delivers various stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, including introductions of new cards, behind-the-scenes industry stories, and guides for card beginners.

#. "Additional fees are charged for overseas KRW payments, so transactions in local currency are advantageous." Office worker Mr. A, who tried overseas direct purchase for the first time on AliExpress during last Black Friday (Bl프), was surprised to receive such a message from his card company. He had made a payment while the price was displayed in Korean won, resulting in double currency conversion with extra fees. Mr. A quickly canceled the payment and requested to pay again in the local currency. He also applied for the overseas KRW payment (DCC) blocking service provided by the card company.

Many of you probably did overseas direct purchases during last month's global shopping events like China's Guanggun Festival and the US Black Friday. It's an opportunity to buy items you've been eyeing at a lower price, but some may have been surprised to find the payment amount on the card statement higher than expected. This usually happens because the payment was made in KRW instead of the local currency. When making overseas direct purchases, card payments should be made in the local currency to reduce fees.

When paying in local currency for overseas direct purchases, the process goes as follows: 'Local currency payment → converted to US dollars and billed to global brand card companies (Visa, MasterCard, etc.) → domestic card company converts to KRW and bills the member.' If you pay in KRW, an additional currency conversion from KRW to local currency occurs before payment, resulting in one more exchange fee. Because of this, you end up paying about 5-10% more in fees. This structure charges a fee for the convenience of displaying the amount in KRW.

Therefore, it is more advantageous to pay in local currency not only when traveling abroad but also when making overseas direct purchases. If the credit card receipt shows an amount in KRW in addition to the local currency amount after payment, it means DCC was used, so you should cancel and request payment again in the local currency. Since DCC may be automatically set in some cases, it is necessary to check whether it is automatically set on overseas direct purchase sites. Registering for the overseas KRW payment blocking service provided by the card company can also be a good method.

Additionally, it is advisable to use credit cards that allow you to request payment suspension in case of returns or cancellations during overseas direct purchases. Overseas card payments are only available as lump-sum payments, but if the amount is burdensome, you can request installment conversion from each card company. However, in this case, you must bear the installment fees for the installment payment. Above all, the first step in overseas direct purchases is to check whether the card you hold is usable overseas (Visa, MasterCard, etc.).