How do you pay for goods & services in Hong Kong?
Mar 11th, 2004, 04:28 AM
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How do you pay for goods & services in Hong Kong?
Verified with my credit card company that they charge a 3% fee for foreign currency transactions! Any advise for finding a better deal? Or other options for payment of goods and services in Hong Kong?
Will check the ATM fees, but would rather not have to deal with all cash. Thank you for any ideas!
Will check the ATM fees, but would rather not have to deal with all cash. Thank you for any ideas!
Mar 11th, 2004, 05:21 AM
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Almost all credit cards cherge a 2-3% fee on foreign exchange. Because you get the bank rate on foreign exchange, you won't be paying thta much more for your purchases. And if you get any goodies by using your credit card (like frequent flier miles or rebates) it's worth it.
You will likely do better with ATM machines, because you get the bank exchange rate. However, most banks charge a fee to use your card at a foreign cash machine. My bank charges US$1.50, but some banks charge several dollars. Depending on your bank charges and how much you take out at a time, ATMs may be the best deal. However, then you have to hassle with cash. I use cash (from ATMs) for smaller purchases and credit cards for larger purchases (like my hotel bills).
The other option is travelers checks, but they often turn out to be the worst deal because there is usually a fee for cashing them. And if you use travelers checks to pay your hotel bill, you'll also get the poor exchange rate the hotel gives you. I haven't used travelers checks in years.
You will likely do better with ATM machines, because you get the bank exchange rate. However, most banks charge a fee to use your card at a foreign cash machine. My bank charges US$1.50, but some banks charge several dollars. Depending on your bank charges and how much you take out at a time, ATMs may be the best deal. However, then you have to hassle with cash. I use cash (from ATMs) for smaller purchases and credit cards for larger purchases (like my hotel bills).
The other option is travelers checks, but they often turn out to be the worst deal because there is usually a fee for cashing them. And if you use travelers checks to pay your hotel bill, you'll also get the poor exchange rate the hotel gives you. I haven't used travelers checks in years.
Mar 11th, 2004, 12:47 PM
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MBNA is the best credit card company for foreign transactions, they normally don't tack on the extra conversion fee (other than what Visa or Mastercard charges which I think is 1%). We have an MBNA card that we use specifically for foreign travel. Get the Barnes and Noble one and you get 1% rewards at Barnes and Noble - helps pay for the guide books!
http://www.mbna.com/creditcards/shopping_rewards.html
http://www.mbna.com/creditcards/shopping_rewards.html
Mar 11th, 2004, 02:33 PM
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Amex (Australian gold card) charge 2% commission on foreign credit card purchases. We just used ATM's when we needed cash. The fees and charges are all part of the cost of travelling, unfortunately. You can always take cash!
Mar 12th, 2004, 06:31 AM
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If you do some checking around, you can find a credit card from a bank that does not add to the fee charged by the Visa/MC network. You can also find a bank that does not add a fee for usage of an overseas ATM. We use USAA Federal Savings bank with good results, and they are very accomodating for overseas transactions, as their primary customer basis is the military.
We just got back from Hong Kong and I checked both my credit card receipts and ATM receipts, and found both had very comparable rates. I would suggest that you carry a decent amount of local currency in Hong Kong, as many of the smaller establishments either don't accept credit cards, or accept them only if the transaction is over a certain amount. In Macao, for example, my wife was cold so we bought her a nice sweater, but had to pay cash as it was only $90 HK. I have to admit I enjoyed the feel of a few thousand dollars in my wallet; it made me feel rich.
Also, the octopus card, which is very handy in Hong Kong, can only be purchased or reloaded using cash.
We just got back from Hong Kong and I checked both my credit card receipts and ATM receipts, and found both had very comparable rates. I would suggest that you carry a decent amount of local currency in Hong Kong, as many of the smaller establishments either don't accept credit cards, or accept them only if the transaction is over a certain amount. In Macao, for example, my wife was cold so we bought her a nice sweater, but had to pay cash as it was only $90 HK. I have to admit I enjoyed the feel of a few thousand dollars in my wallet; it made me feel rich.
Also, the octopus card, which is very handy in Hong Kong, can only be purchased or reloaded using cash.
Mar 12th, 2004, 06:32 AM
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Lyndie, sorry if it sounded like oneupsmanship, that wasn't my intent. I was just being specific about the kind of card. In the US there are so many kinds of AmEx cards, and they all seem to have different rules. By the way, I get my card for free. I certainly wouldn't pay $900 for it.
Cicerone, I guessed yours was an overseas card. I will call AmEx again, but last I called them (October) they said that all of their available cards charged the fee on foreign purchases. Note that my statement never shows the surcharge. You only know you've been charged because of the exchange rate.
Cicerone, I guessed yours was an overseas card. I will call AmEx again, but last I called them (October) they said that all of their available cards charged the fee on foreign purchases. Note that my statement never shows the surcharge. You only know you've been charged because of the exchange rate.
Mar 12th, 2004, 06:53 AM
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I'm very confused by this discussion.
If it comes to drawing cash, then all cards add a fee to the sum drawn.
But one of the benefits of using a credit card for purchases overseas is that transactions are converted to the home currency using a rate usually far better than the tourist rate. It used to be something called the Interbank rate, but now is that plus a little bit. Perhaps banking types can fill in some of the arcana on this.
Or have things changed radically very recently indeed?
I've just been using my card in and around HK and China, and used it all over the Baltics and Western Europe late last year, and found the exchange rate for each purchase (not cash withdrawal) to be better than the tourist rate, as usual.
I recently sent back my UK Amex Gold Card because I was sick of paying an annual fee for something I never used, and whose benefits had been continually cut back ever since I got the thing about 15 years ago. The only time I saw any sign at all of service was when I received a phone call from the UK to Canada begging me to reconsider. As I told them, I've really no idea why anyone uses Amex any more when there are plenty of fee-less gold cards around, whose incentive schemes are free or attract only a very small charge (unlike Amex's) and are considerably easier to operate and understand. And American Express's travel services are hugely overpriced, and so never used.
Time was when traveller's cheques were free (now only by mail, and outdated by ATMs), there was a free email address (service withdrawn), post restante was free (now there's a per letter charge and the Internet has made the service unnecessary anyway), and the incentive scheme was free (then optional for a fee, and now compulsory with a corresponding compulsory increase in fee at least in the UK).
But I've certainly never seen any 3% surcharge from any of my other gold cards on foreign transactions (and thinking about it I bought something over the Internet in Thai baht in January, and there was no surcharge of any kind).
So I think I must be misunderstanding the point here.
Incidentally, I use an ATM card which charges me just HK$20 (or about US$2.50) per transaction, whatever the size, and thus usually works out at well under 1%, which seems like a fair deal to me.
Peter N-H
http://members.axion.net/~pnh/China.html
If it comes to drawing cash, then all cards add a fee to the sum drawn.
But one of the benefits of using a credit card for purchases overseas is that transactions are converted to the home currency using a rate usually far better than the tourist rate. It used to be something called the Interbank rate, but now is that plus a little bit. Perhaps banking types can fill in some of the arcana on this.
Or have things changed radically very recently indeed?
I've just been using my card in and around HK and China, and used it all over the Baltics and Western Europe late last year, and found the exchange rate for each purchase (not cash withdrawal) to be better than the tourist rate, as usual.
I recently sent back my UK Amex Gold Card because I was sick of paying an annual fee for something I never used, and whose benefits had been continually cut back ever since I got the thing about 15 years ago. The only time I saw any sign at all of service was when I received a phone call from the UK to Canada begging me to reconsider. As I told them, I've really no idea why anyone uses Amex any more when there are plenty of fee-less gold cards around, whose incentive schemes are free or attract only a very small charge (unlike Amex's) and are considerably easier to operate and understand. And American Express's travel services are hugely overpriced, and so never used.
Time was when traveller's cheques were free (now only by mail, and outdated by ATMs), there was a free email address (service withdrawn), post restante was free (now there's a per letter charge and the Internet has made the service unnecessary anyway), and the incentive scheme was free (then optional for a fee, and now compulsory with a corresponding compulsory increase in fee at least in the UK).
But I've certainly never seen any 3% surcharge from any of my other gold cards on foreign transactions (and thinking about it I bought something over the Internet in Thai baht in January, and there was no surcharge of any kind).
So I think I must be misunderstanding the point here.
Incidentally, I use an ATM card which charges me just HK$20 (or about US$2.50) per transaction, whatever the size, and thus usually works out at well under 1%, which seems like a fair deal to me.
Peter N-H
http://members.axion.net/~pnh/China.html
Mar 12th, 2004, 07:20 AM
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This is my experience during my HK trip a year ago:
HK$ is hooked to US$, so the exchange rate is held in a close range. 1US$ is always equal to about HK$7.70 to 7.80.
I used a MBNA Platinum card associated with a university. 1US$=HK$7.72, which is basically the same as the bank rate. No service charge whatsoever.
I also used my AE Delta Skymiles Platinum card. All come out to 1US$=HK$7.645 with no additional surcharge. If you do a little calculations, 7.645 is about 1% lower than 7.72.
I also made a few ATM withdrawals at various large banks - HSBC, Standard Chartered & Bank of China. For HK$1,000, I was charged US$129.53, at the rate of 7.72 (same as MBNA). ATMs in Hong Kong do not charge extra for cards issued by other banks, if I remember correctly. However, my own bank, Citizens of RI, did charge me US$3 per transaction.
So, during my trip, the best rate is achieved by using the MBNA card, for basically no fee. ATM is US$3, while AE's rate is 1% worse than MBNA or my bank's.
Any of the above way, I paid less than 3% of fees (as I usually got HK$1,000 or more at an ATM). To me, that's very acceptable, for I don't have to worry about carrying lots of cash with me all the time, and even at 3%, it's still way better than the old days when you get ripped by currency exchangers.
Finally, I want to add one thing. While many merchants accept credit cards, you may be able to get a better price with cash at many merchants. Definitely not at major chain stores, but say small merchants in Stanley, or antique places on Hollywood Road. You can definitely negotiate a better price with cash, as with cash, the merchant - i) don't have to pay the ~3% fees to the credit card companies; and ii) they have ways to not report revenues and therefore taxes...
HK$ is hooked to US$, so the exchange rate is held in a close range. 1US$ is always equal to about HK$7.70 to 7.80.
I used a MBNA Platinum card associated with a university. 1US$=HK$7.72, which is basically the same as the bank rate. No service charge whatsoever.
I also used my AE Delta Skymiles Platinum card. All come out to 1US$=HK$7.645 with no additional surcharge. If you do a little calculations, 7.645 is about 1% lower than 7.72.
I also made a few ATM withdrawals at various large banks - HSBC, Standard Chartered & Bank of China. For HK$1,000, I was charged US$129.53, at the rate of 7.72 (same as MBNA). ATMs in Hong Kong do not charge extra for cards issued by other banks, if I remember correctly. However, my own bank, Citizens of RI, did charge me US$3 per transaction.
So, during my trip, the best rate is achieved by using the MBNA card, for basically no fee. ATM is US$3, while AE's rate is 1% worse than MBNA or my bank's.
Any of the above way, I paid less than 3% of fees (as I usually got HK$1,000 or more at an ATM). To me, that's very acceptable, for I don't have to worry about carrying lots of cash with me all the time, and even at 3%, it's still way better than the old days when you get ripped by currency exchangers.
Finally, I want to add one thing. While many merchants accept credit cards, you may be able to get a better price with cash at many merchants. Definitely not at major chain stores, but say small merchants in Stanley, or antique places on Hollywood Road. You can definitely negotiate a better price with cash, as with cash, the merchant - i) don't have to pay the ~3% fees to the credit card companies; and ii) they have ways to not report revenues and therefore taxes...
Mar 12th, 2004, 07:51 AM
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I agree that there is some confusion here between using a card to pay for a purchase and using one to withdraw cash. Kaithie, if you are talking about withdrawing cash then they may be a fee, I have never done that as ATMs always work for me.
I also bought a Certificate of Deposit from my bank and in return, they waived all ATMs fees in the US and overseas. I have had this in place for about 3 years, and it saves quite a bit on each ATM withdrawal. The only fees that aren't waived is if you use an ATM at a convenience store or gas station, i.e., not at a bank.
I also bought a Certificate of Deposit from my bank and in return, they waived all ATMs fees in the US and overseas. I have had this in place for about 3 years, and it saves quite a bit on each ATM withdrawal. The only fees that aren't waived is if you use an ATM at a convenience store or gas station, i.e., not at a bank.
Mar 12th, 2004, 09:04 AM
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Clearly, people have had very different experiences! I'm talking about using a credit card for purchases, not for withdrawing cash. In the last few years in the US, credit card companies have added a surcharge for use in currencies other than the dollar. (I noted that in VN, where the credit card purchases were recorded in US dollars, there were no surcharges.)
As an example, I was in Thailand and VN in November. At an ATM in Bangkok, the exchange rate was 39.51 baht to the dollar (plus I paid US$1.50 to my bank for the withdrawal). On my credit cards (AmEx and United Mileage Plus Visa) my effective exchange rate ranged from 38.69 to 39.07. Of course, there are day to day fluctuations in the exchange rate. SInce both an ATM and a credit card give you the bank rate, which is better than the "street" rate, I consider it close to a wash. If I pay a few dollars more on a large hotel bill because I used a credit card, so be it.
As an example, I was in Thailand and VN in November. At an ATM in Bangkok, the exchange rate was 39.51 baht to the dollar (plus I paid US$1.50 to my bank for the withdrawal). On my credit cards (AmEx and United Mileage Plus Visa) my effective exchange rate ranged from 38.69 to 39.07. Of course, there are day to day fluctuations in the exchange rate. SInce both an ATM and a credit card give you the bank rate, which is better than the "street" rate, I consider it close to a wash. If I pay a few dollars more on a large hotel bill because I used a credit card, so be it.
Mar 12th, 2004, 04:33 PM
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Kathie- I was joking about the oneupmanship! My card is a company one also. For info to other posters-Amex have a note on the rear bottom corner of their statement which says all foreign currency transactions attract a single conversion commission of 2%. My other credit card providers, Visa & Mastercard are similar. They do not note the charge as a separate item on the bill-it is included in each foreign transaction on the statement. If it mattered all that much I'd pay cash for everything, however it would not suit me to carry $1000's of US$ everywhere.
Mar 12th, 2004, 06:49 PM
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WEel when I travel I keep some easy cash on me and then I just use an ATM. When you condisor how much you are spending on the air ticket, hotels, sightseeing etc etc, the odd few % aren't going to make a world of difference. 2% on $100 even is only $2. I wouldn't let it be an issue, you are on a vacation, enjoy, relax,...take it easy.
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