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#47528 - 05/27/05 09:33 PM no foreign fee credit cards?
JA Offline
Full Member

Registered: 09/28/01
Posts: 117
Loc: usa
My credit card (CITI/MC) notified its customers that all foreign transactions will now carry a 3% finance charge.

I have not checked by phone with them but I believe that this will be in addition to the 2% that Visa/MC charge (foreign currency transaction)separatedly.

This charge is for regular expenditures/charges such as hotels or meals. Cash withdrawals are much worse.

Credit Unions used to allow fee-free charges in foreign countries; in other words it was just like using the card at home.

Question: Does anybody know of fee-free c/c to use abroad?

Thanks,

JA [Hope this is right place to place this]
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JA

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#47529 - 06/01/05 06:34 AM Re: no foreign fee credit cards?
Jana Offline
Member

Registered: 04/13/02
Posts: 188
Loc: Tucson
My local bank also charges 3% for credit and debit transactions and $5.00 per ATM withdrawal. The local credit union charges %1 for credit and debit and 4 free withdrawals per month and $.75 per withdrawal after that. Banks are a total ripoff. There is no way to justify a percentage fee. They are greedy!

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#47530 - 06/01/05 06:55 AM Re: no foreign fee credit cards?
madridmadridmadrid Offline
Executive Member

Registered: 06/03/04
Posts: 324
Loc: madrid
My credit union doesn't charge any percentage or ATM usage fee. I would keep shopping around...

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#47531 - 06/01/05 08:46 PM Re: no foreign fee credit cards?
SFY Offline
Member

Registered: 02/27/03
Posts: 57
Loc: Filadelfia
VISA and MasterCard charge a 1% currency conversion fee for international transactions no matter who issues the card.

The number of issuers who don't tack on an additional fee has been shrinking. Most credit unions and I believe Capital One (though you should check with them) don't add on a fee of their own.

American Express charges a straight 2% on all international transactions.

What is even more infuriating about Citi's new fee is that it is even tacked on to international transactions that are charged in dollars and not euros (an occasional occurence I encountered last year in Spain). In these cases not only do you get a less than optimal exchange rate but you have to pay Citi's exhorbitant fee on top of it!

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#47532 - 06/01/05 11:33 PM Re: no foreign fee credit cards?
ditravelphoto Offline
Member

Registered: 05/08/04
Posts: 64
Loc: Seattle
Capital One just went with the crowd recently and is starting to impose a transaction fee on all international charges.

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#47533 - 06/03/05 07:05 PM Re: no foreign fee credit cards?
Anonymous
Unregistered


I am absolutely sick of these rip-off practices by commercial banks. I just reopened my Visa card account through one of my credit unions and will from now on refuse to use any commercial bank's Visa/MC/Amex (except maybe for the auto rentals for the free CDW).

Over the last few years, one by one almost every commercial bank has moved to the dark side and imposed this ridiculous fee. What service are they providing exactly that justifies an extra 2% charge. I can somewhat understand the 1% Visa/MC charge but no more.

I say that a grass roots movemnet start to boycott use of non credit union credit cards for foreign charges.

Just letting off some steam.

RP

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#47534 - 06/03/05 09:32 PM Re: no foreign fee credit cards?
MadridMan Offline


Executive Member

Registered: 05/06/00
Posts: 10011
Loc: Madrid, Spain (was Columbus, O...
RP, it's good to "let off steam" every now and then. And for this you have good reason. Credit Card companies are in the business of making money. Credit Unions are too but not to THAT extent. In fact, NOT ALL credit unions offer these great no-fee transactions for overseas purchases. My credit union also imposes these fees so it's of no benefit to me whatsoever. Hmph. rolleyes

Saludos, MadridMan
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#47535 - 06/04/05 03:42 AM Re: no foreign fee credit cards?
nevado Offline
Member

Registered: 06/11/00
Posts: 620
RP, I used to justify it for the auto insurance as well until I got stung last September. I had a broken mirror while in Mallorca and was charged immediately for the repairs upon returning the vehicle. I filed a claim, sent all of the documents on my end, and months later they notified me that AVIS in Mallorca failed to provide the necessary documents to complete my claims. I'm trying to fight it but it's very difficult (not to mention I have 2 other battles I'm dealing with at the same time...I need to let off some steam as well). So much for credit card insurance- can you imagine if I had crashed the car or something?
So, my advice to anyone using the insurance- if possible, try and avoid paying the damages to the rental company (I didn't have a choice so I'm not sure it's even possible).

I'm with you- boycott. My credit union just caved as well- they are passing along the 1% now that visa has lowered their charge from 2% - 1%. So, I'm not furious about it, just not excited. And, about dollar purchases abroad- American Express charges 2% as well.

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#47536 - 06/11/05 04:35 PM Re: no foreign fee credit cards?
meencantaespana Offline
Member

Registered: 01/13/05
Posts: 107
Hey, I use my ATM one card and its a debit/checking/savings one and only when I take money out of the ATM is charges 1 US dollar which is good considering here it can go up to $5! So otherwise when I use the One Card at shops it doesn't charge anything.

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#47537 - 06/15/05 08:32 PM Re: no foreign fee credit cards?
JA Offline
Full Member

Registered: 09/28/01
Posts: 117
Loc: usa
The latest... there seems to be a reaction (according to the Times) against the fees...

A Fee Even the Card Issuers Cannot Explain
By CHRISTOPHER ELLIOTT
LARRY BRADLEY switches credit cards an average of once a year, but not to rack up extra frequent-flier miles or to pin down a lower interest rate. Mr. Bradley, a small-business owner from Tyrone, Ga., swaps plastic to escape rising currency-conversion fees.

He has jumped from Visa to MasterCard to American Express, and back again, numerous times during the last decade in an effort to skirt surcharges on international transactions that have risen from 1 percent to as high as 4 percent. "It's a money grab," he grumbled. "Credit cards are hoping their customers won't read the fine print on their cardholder agreements. But I do."

Some customers apparently do pay attention, though. Just last Thursday Visa suspended its 1 percent international service assessment on all single-currency cross-border transactions. In a statement, Visa said only that it was "reviewing the fee structure," but you can't help suspecting that complaints from customers was the reason.

Despite that small victory, I have come to the same conclusion Mr. Bradley did: Many - if not all - of the charges are unjustified. Credit card companies beg to differ, of course. So I asked them to explain their reasoning.

Simon Barker, a spokesman for Visa, said the assessment pays for "the basic cost of having the access you get when you use Visa internationally." Such as? "It's for the benefit of using the card," he told me.

American Express, which exacts a 2 percent fee - raised from 1 percent in 1999 - would not discuss what it costs the company to exchange currency. But a spokeswoman, Desiree Fish, said its fee was in line with the industry. In other words, it imposes the cost because everyone else does.

It isn't just the credit card companies that have their fingers in your pocket. The big banks do, too. Wells Fargo, which issues my Visa card, will tack a 3 percent charge for handling the currency conversions during my trip to Europe this summer (returning 1 percentage point of that to Visa). Not a bad way to make a quick buck for an industry that pays just 1.5 percent for a three-month certificate of deposit.

Why such a hefty fee? To find out, I dialed Wells Fargo's customer hotline. The first phone representative admitted she had no idea. The second said it was because the bank needed to make more money. Neither answer quite worked for me, so I called the bank in my official capacity as a journalist. A spokeswoman said the combined 3 percent levy, which the bank has had in place since 2000, was necessary to cover both the "convenience" of using a card overseas and the cost and risk of the currency conversion.

Interesting concepts, but she was unable to elaborate with actual examples of Wells Fargo's expenses.

One of the most convincing explanations for these credit card charges came from Linda Sherry, a spokeswoman for Consumer Action, a nonprofit advocacy organization based in San Francisco that tracks credit card fees. "There's no legitimate reason for credit cards to charge currency-transaction fees," Ms. Sherry told me. "Simply put, it's a profit center for the banks and card companies. It's found money."

Nobody expects credit card companies and their banking partners to convert your dollars to euros and yen and back again free. They do incur costs and risks in conducting those transactions, after all. What grates business travelers like William Gregg, an intellectual property consultant in Portland, Ore., is the utter confusion that surrounds the terms - a vagueness that strikes some customers as willful.

Mr. Gregg tried to escape the fees by paying with a debit card, but the switch did nothing to exorcise his bafflement. "It's a total mess," Mr. Gregg said. "I make a purchase when I'm traveling internationally, and a few weeks later I get a statement, and all I'm told is this is how much I paid for it in dollars. And I'm totally in the dark. What's the rate I'm getting? Who knows? They're not telling me."

Recently, many banks and credit card companies reluctantly began breaking out the currency charges and rates after customers threatened to sue them, according to Ms. Sherry. But the progress is slow and the statements remain maddeningly difficult to decipher.

But beyond that, credit card companies should stop referring to these charges as conversion fees. If they're convenience fees, then why not say so? (How much should your credit card charge? The experts I've talked to say they could halve their fees and still turn a tidy profit.)

The solution for independent business travelers is to find a feeless card. They do exist. Some credit unions, for example, do not bill their members for currency exchanges. For corporate travelers who are part of a managed program, a fix must happen at a higher level, with a travel manager asking American Express, MasterCard or Visa for relief from these largely meaningless surcharges.
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JA

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