Starting this Sunday (1st), expenses made with credit cards abroad will be charged according to the dollar exchange rate equivalent to the day. Therefore, it will no longer be valid according to the rate exchange rate in the days leading up to the invoice closing.
The new rule was defined by the Central Bank (BC) at the end of last year and should avoid surprises when paying bills.
The option to lock the exchange rate so that expenses are paid according to the dollar exchange rate set for the day. This is not new and has already been authorized by the Central Bank since 2016. However, few banks passed this possibility on to consumers.
Previously, the amount to be paid on the invoice was only defined ten days before closing, which left the consumer without knowing exactly what exchange rate would be used for the conversion.
However, with the new rule, the real value of expenses will be equivalent to the dollar exchange rate on the day the transaction is carried out, which may also vary between banks or card brands, as each one has its own calculation formula.
Another important detail is that the BC also stipulated that banks and financial institutions must disclose daily on their service channels, until 10 am, the quote that will be applied for that day.
The measure, as disclosed in a note, aims to combat “the reduced possibility of comparing conversion rates practiced by card issuers, which discourages competition”.
Taking care of your international card
Are you excited about taking a trip to the United States? Despite the practicality of the new rule, there are still some aspects related to credit cards that should be observed carefully. See below what they are:
How is IOF charged for international credit cards?
In addition to the dollar exchange rate, it is worth remembering that expenses made with a credit card in international territories are subject to an IOF tax, the Tax on Financial Transactions, of R$6.38% per purchase. For example: imagine that a tourist made a transaction in dollars, in the amount of R$1,000TP4T.
When paying the invoice, a fee of 6.38% will be charged on the purchase amount. To calculate how much tax will be paid, simply do R$ 1,000 x 0.0638 = R$ 63.80. Therefore, the final amount to be paid will be R$ 1,063.80.
And there's no point trying to escape: debit cards or the famous prepaid cards are also subject to an IOF of 6.38% per purchase, if they are used to pay international debts.
So, if you are going to travel and are only thinking about the financial side, the tip that comes in handy is: take physical money.
“If we leave aside the issue of security for a moment, then the best option is to take the currency in cash. This way, the transaction is only subject to the 1.1% exchange rate, instead of the 6.38% for cards,” explains Henrique Erbolato, a lawyer specializing in tax law and partner at Santos Neto Advogados.
How to use your credit card abroad
In addition to worrying about the exchange rate and the amount of IOF to be paid, there are some precautions that must be taken before the card is used for trips abroad and becomes valid.
1) Firstly, it is always important to check whether the credit card is international and can be used in other countries; generally, the information is described on the card itself;
2) Another important detail is to notify the bank in advance that you will be traveling internationally, so that it can unlock the function. Otherwise, the card may be blocked for 'suspicious use' – a security measure that is commonly adopted by different financial institutions;
3) Here's a warning: to avoid unpleasant surprises, it is important to always find out in advance about the payment method that will be used on the invoice, since other forms of calculation are also not illegal and can be used, as long as the customer expressly chooses to accept them;
4) Credit card ownership is also an issue that cannot go unnoticed: although the chip is the most widely used option in Brazil, there are still many countries or stores abroad that prefer reading by the magnetic strip, which must be signed by the cardholder. And since many establishments abroad only make purchases upon presentation of an identity document, the transaction may not be completed if the card belongs to a third party.