What exactly is Dynamic Currency Conversion? This is a credit card feature that lets you make a point-of-sale credit card purchase in a foreign country using the currency of your home country.

Simply put, with Dynamic Currency Conversion, you can choose to pay in US dollars when you are overseas. This is a merchant-provided service that allows you to view your overseas credit card transactions in US dollars at the point of sale.

While that may sound like a no-brainer wonderful option, it actually isn't that straightforward. Here are a few important things you ought to know about this mysterious currency conversion fee.

1. You almost always wind up paying more

For starters, Dynamic Currency Conversion fees are levied by the merchant, though this is typically done through a service provider. If you choose to pay in US dollars instead of the local currency when you are overseas in a foreign country, the currency conversion occurs in real time.

The exchange rate offered to you will most definitely include a markup - this will mean the exchange rate you are getting from the merchant and/or service provider is actually much less attractive than what the market rate is offering at that point in time (think: lousier exchange rate).

That's not all. You may be liable for extra fees and charges, in addition to a foreign transaction fee to your credit card issuer if your credit card does not come with the $0 foreign transaction fee perk.

2. Dynamic Currency Conversion is an optional service

Know that you have the right to politely decline this optional service even though it lets you lock in an exchange rate at the point of sale. Remember, although it helps when you are looking to make price comparisons, the exchange rate offered will probably not be in your favor to begin with, considering the unknown markup applied. The additional fees and charges are a whole new world, too.

Now that you are aware of how complex and expensive Dynamic Currency Conversion transactions can be, it only makes sense that you avoid such transactions going forward. The typically lousier exchange rate and potential additional fees are just not worth it, especially if you are a big spender.

To put it bluntly, Dynamic Currency Conversion is simply another way for merchants and banks to sneak additional fees onto unwary customers' bills. As much as possible, use a credit card that lets you avoid foreign transaction fees whenever you are abroad. This awesome benefit will help you keep your liable fees to a minimum despite the fact that you still have to pay the credit card currency conversion fee when you decline the Dynamic Currency Conversion service.

One more thing, be cautious if you frequently shop online internationally or use PayPal to pay for your international online purchases. PayPal is known for setting Dynamic Currency Conversion to default. Make sure you manually swap the option around before paying to avoid all the extra fees and charges that lead many unsuspecting shoppers to overpay!

Denise Bay is a staff writer at GET.com. Email: denise.bay@get.com.