Are there additional fees for using credit cards in Sri Lanka?

Hello! Regarding whether you'll be charged fees when using a credit card in Sri Lanka, let me share my experience. This issue needs to be looked at in several different situations.

In short, the answer is: Yes, but not entirely. There are mainly these three types of "fees." If you understand them, you can save a lot of money.

1. Your own bank's "Cross-border transaction fee"

This is the most common type of fee. Think about it: you're spending in the local currency, "Rupees" (LKR), in Sri Lanka, but your credit card statement is in RMB (or your other home currency). Your issuing bank needs to convert LKR to RMB for you, and this "conversion" service isn't free.

• How much is the fee? It's usually between 1.5% and 3% of the transaction amount. For example, if you spend the equivalent of 1000 RMB in LKR, you might pay an extra 15 to 30 RMB in fees.
• What to do? Before you leave, definitely! Definitely! Call the customer service number on the back of your credit card and ask about the "foreign transaction fee" or "currency conversion fee" for that card. Some travel-focused "multi-currency" or "no foreign transaction fee" credit cards don't have this charge. If you have one, bring it.

2. Local merchants' "Card surcharge"

This one depends on luck. In Sri Lanka, especially in some small shops, restaurants, or guesthouses, they might tell you there's an extra 2-3% charge if you pay by card.

• Why does this happen? Because installing a card machine (POS machine) also has a cost, and banks take a cut from each transaction. Some owners don't want to bear this cost themselves, so they pass it on to you.
• What to do? When you're about to pay in smaller places, you can ask: "Cash or Card? Any extra charge for card?" This way, you'll know what to expect. This situation is less common in high-end hotels, large chain supermarkets, or big shopping malls in Colombo.

3. The most tricky one: "Dynamic Currency Conversion" (DCC)

You absolutely must pay attention to this one; it's a big trap! After you swipe your card, when the attendant brings the POS machine for you to enter your PIN or sign, an option might pop up on the screen:

"Would you like to settle in Chinese Yuan (CNY) or Sri Lankan Rupees (LKR)?"

When you see this, don't even think twice, always choose to settle in the local currency, "Sri Lankan Rupees (LKR)"!

• Why? If you choose RMB, it might seem convenient because you immediately know how much you've spent. But in reality, the exchange rate provided by the local bank operating the POS machine is very, very poor – much worse than your own bank's rate! For the sake of convenience, you might end up paying an extra 3-5% or even more "unnecessary money," which is higher than the first type of fee mentioned above.
• Remember this: When using a card abroad, always choose to settle in the local currency.

To summarize, here are a few practical tips for you:

1. Before you go:

   • Call and ask about your credit card's "foreign transaction fee." Prioritize bringing cards that don't have this fee.
   • Also, inform your bank about your travel plans (dates and locations) to prevent them from freezing your card, thinking it might be fraudulent activity.
   • Bring one or two extra cards from different banks (Visa and Mastercard are the most widely accepted), just in case one card doesn't work.

2. When spending in Sri Lanka:

   • Feel free to use your card in large shopping malls and high-end hotels.
   • In small shops and guesthouses, first ask if there's an extra charge for card payments.
   • When you see the currency option on the POS machine, firmly choose the local currency (LKR).
   • Always carry enough cash! Many places in Sri Lanka are still cash-based. For example, paying for TukTuk rides, buying things from street vendors, browsing small markets, giving tips, etc., all require cash.

I hope these tips are helpful. Have a great time in Sri Lanka!