TC

I know I'll get a lot of torment from seasoned travelers for not knowing this already. I'm sure you'll point out that its been discussed to death on this very board, but I'm still going to post in case there are a few other clueless shoppers left in the world.<BR><BR>American Express charges 2% of the transaction amount as a service fee to do foriegn currency exchanges on your card. Now this isn't ordinarily a big deal - a few cents on a $20 purchase or a few dollars on your Mexican hotel bill, but I just bought additional time share at my condo and they charged me several hundred dollars to process the transaction.<BR><BR>No need to chastise me for not reading my AmEx contract. I know somewhere in the fine print it says I agreed to this fee. I know I've paid it before on small purchases never even realizing it was more than a fluctuation in the exchange rate. What upsets me is in the marketing of an AmEx card we are told that they get &quot;the most favorable&quot; exchange rates on foreign currency. Implying that that great rate is passed on to the card member. I could have gotten a better exchange rate at the hotel front desk than what AmEx got for me after they took their 2% swipe.<BR><BR>So here's my point. If you are going to make a large purchase or pay a large hotel or cruise bill, think twice about how much addtional that will cost when you get home. I think this policy should be changed. It doesn't cost AmEx any more to process a $10 transaction than it does to process a $1 million transaction. To charge a percentage rather than a flat transaction fee is a real rip off to card members. And please don't tell me that all the card companies charge this fee, or that I should feel lucky that it wasn't more. Its still a rip off.<BR><BR>Mr. Barry Arnold<BR>Sr. VP Customer Serv.<BR>777 American Expressway<BR>Ft. Lauderdale, FL 33337<BR><BR>will get a letter from me regarding this policy - asking that it be reconsidered. And I won't make the mistake of using my AmEx for foreign currency transactions again.

soccr

How does this compare with Visa, Master card (notably Citibank visa/m.c.)?<BR>

SaraL

British Banks charge 2.75% for foreign transactions, but they use the wholesale exchange rate so it doesn't make much difference on 'normal' holiday purchases.

GandCT

soccr,<BR>Visa and Mastercard each charge a 1% conversion fee. I called Citi yesterday and their rep told me that they impose an additional 2%, or 3% total. MBNA, on the other hand, said they do not charge an additional fee above the 1%.<BR>Hope this helps,<BR>Carol

Barb_in_Ga

TC--Yes, this subject has been discussed many times on this forum, but as others have pointed out, you would have encountered fees on any credit card purchase made outside the US. ALL Visa and Mastercard purchases have a 1% fee that is added on by Visa or MC International, then you may have other fees up to 2% more added by the issuing bank, but you most likely will not know it, since these charges are not itemized separately as Amex does. Of the larger card issuers, only MBNA and Capital One don't add fees onto the standard 1%.<BR><BR>It is extremely unlikely that the exchange rate at your hotel would have been better than the rate you were charged by Amex, since an individual business must pay to convert currency as well. <BR><BR>Even if you had taken cash, you would have had some sort of cost of currency conversion, whether it is listed separately as a fee or folded into the rate. I would be surprised if an American check would be accepted, so that pretty much covers the purchase options.<BR><BR>The bottom line is that currency conversion does cost money, and there is no such thing as a free lunch!

RufusTFirefly

It doesn't hurt to ask about the rate at your hotel. Two of our hotels in Italy gave the published rate with no service charge as a goodwill gesture to the guests. The other 3 hotels wanted an arm and a leg.

Christina

The bright side is that AmEx is lower than many VISA/MCs because I guess it's only a total of 2 pct whereas many are 3 pct total. And it is true as Barb says that you never would avoid at least 1 pct, so your AmEx additional charge was really only 1 pct. Assuming they process at bank rate (my CC does, I've compared to official rates), I also doubt that you could exchange at a hotel for only 1 pct over wholesale bank rates. I had a hotel in Puerto Vallarta that did actually give a better exchange rate than the local banks (on TCs), but that still wasn't wholesale bank rate in either place, it was a retail exchange rate for small amounts.<BR><BR>I don't believe marketing literature, because it's meant to be deceptive. I think AmEx customers pay a lot just for having that card, right? I guess some people think they give you something that makes a fee worthwhile for having a card, although I don't know what that is. Well, it is actually better than many cards, so another good thing is that if you had had another card, you probably wouldn't have known its rate and it could have been more.

xyz123

The rate credit card companies generally use is indeed the most favorable rate i.e. the interbank rate the rate banks settle with each other when exchanging millions of dollars. The 1% mark up is on this interbank rate.<BR><BR>You almost never get anything near the interbank rate when exchanging cash or TC's; not even close. So do not fall for the hype such as the one fro Chase on its currency by mail exchange policy that they don't charge a fee; of course they don't. They simply give you an obscenely low rate. Same thing is true of AAA which brags its foreign currency TC's are available without a fee.....but check out the rate and how much it is more than the interbank rate.<BR><BR>Do remember that every MC/Visa bank passes along the 1% which is added to the amount they send to your bank before it gets there. It is then up to the bank to see if they can rip you off because you are too dumb to understand for the extra 2% fee; a fee that is absolutely throwing money away as there are banks (MBNA and Capital One as well as USAA) that don't pull this stuff. It really does pay to do your homework a little.

Patrick

OK, I'll stick my neck out here and be ready to be slammed, and I'm sure I will, but at least I hope the slammers read my full post.<BR><BR>I'm not sure why you are concerned with a 2% fee under the circumstances. Nearly anyone with a little business savy will tell you and you can find out from any reading that buying a time share is one of the worst business &quot;investments&quot; you can make. Since you just &quot;added time&quot; to yours for over $15,000, it is clear that you are buying a time share strictly for your enjoyment not as a good investment --WHICH (AND PLEASE LISTEN TO ME) IS PERFECTLY FINE IF THAT'S WHAT YOU WANT TO DO AND YOU FEEL IT IS WORTH IT TO YOU!! But what difference does $300 make on spending $15,000 that is a very poor &quot;investment&quot; to begin with. (And if anyone wants to know where I got those figures I'm determing &quot;several hundred dollars&quot; to mean a minimum of $300 which is 2% of $15,000.) If I bought a plane ticket that normally should be $200 and instead I paid $1000 for it, the last thing I would be complaining about is a small percentage extra fee. If you are that concerned with good use of your money, why are you adding additional time to your time share? But again, I don't blame you for doing so if you somehow feel the money is worth it to you. But if it is worth $15,000 to you, why isn't it worth $15,300?

BeeGee

Not only have I found the transaction fee with Amex to be a bit over the top, but the exchange rate itself has never been as favorable as the one used by Mastercard (MBNA).

xyz123

Patrick:<BR><BR>In the abstract you are correct...it is not a big deal. But there are 2 points:<BR><BR>1. It is an easy fee to avoid. Simply use a credit card issued by a bank not adding the 2%. It's not as if you have an extreme hassle in tryng to save 2%. If you have a Citibank credit card, call MBNA and within days you'll have an MBNA credit card. Use your Citibank card to your heart's content while in the US; simply use the other card in foreign countries. Seems a painless way to save $300.<BR><BR><BR>2. The other point is most people would probably prefer to save money but are very ignorant of just what is going on and they should be able to make an informed decision. Countless people do not understand they do not have a MasterCard, they have a Citibank MasterCard. The decisions are made by Citibank not Mastercard. So I just feel they should know what's going on; this is the crux of the lawsuit that will make a lot of money for the class action lawyers and will see that we each get 23 cents. Nobody in the law suit said the conversion fees are illegal (although the one's the bank's are charging are immoral), they simply say people were not informed. If you make an informed decision that tossing $300 extra out the window on a trip of a life time, that's fine. But I believe most people would prefer to know just what's going on.<BR><BR>Every man is entitled to his opinion but it should be an informed opinion.

TC

I just want to understand your point, Patrick - because I can afford to purchase additional time share, I should then want to through away some additional money on outrageous service fees? How do you think I got the money for the time share in the first place? By paying no attention to any financial matters? Because you can afford a nice house, did you pay no attention to the rate of mortgages? because you can drive a nice car do you not care what the finance rate is for the loan or lease? because you can afford a nice suit do you not care what the dry cleaners charges you to press it? Since you have no idea what deal I made for my time share investment, you really aren't in a position to make judgements on my investment savvy. However, that wasn't the point before or now - as XYZ123 states, its about an informed decision. I was only trying to pass along a little information to those who might not be aware.

Barb_in_Ga

XYZ123--the Amex card charges a TOTAL fee of 2%, and I have compared their exchange rate to my MBNA rate for purchases made on the same day and found no difference.<BR><BR>The most that TC could have saved using any other credit card is 1%, because there is 1% already added to every Visa/MC purchase, even MBNA and Capital One! The advantage to MBNA or Capital One is that they don't add on an additional 1-2% as most credit card issuing banks do.

xyz123

Barb...isn't that what I said? Amex charges 2%, MBNA and Capital One charge 1%, Citibank, Chase, First USA etc. charge 3% all on top of the interbank rate.<BR><BR>Just one other thought on Amex. Amex is widely accepted in Europe but...I have never seen a merchant who takes Amex who doesn't also take MC or Visa. However, there are lots of merchants (the London Underground, the Paris Metro come immediately to mind) that take MC or Visa but won't touch Amex.

ET

I have to agree with Barb. I have an AmEx that charges 2% and a Capitol One card that supposedly only charges 1%. However, in europe, even when I have made charges on both on the same day, the actual exchange rate I received (including those charges) ended up being just about the same. It was also not consistent. While they were always very close, on some days one or the other was just slightly better. Never have been able to figure out why.

Barb_in_Ga

XYZ123--I was merely pointing out the following: sinceTC was so irate about the charges for conversion,let's use Patrick's guess of a $15000 purchase, resulting in $300 in charges from Amex. That same purchase would have resulted in a minimum charge of $150(1%) if he had used Visa or Mastercard. So the most he lost by using Amex was $150, NOT $300. Also, had he used a Visa/MC card that added 2% extra, he could have lost $300 dollars more.<BR><BR>I choose to use my Amex where possible, recognizing that I am paying 1% more for the privilege than when I use my MBNA overseas. I make that decision based on the additional miles and perks that I gain from my Delta Skymiles card, which has resulted in enough points in the last two years to redeem for 2 business class tickets to Europe this Spring. <BR><BR>Consumer advocates generally put a value of $.02/mile on airline miles: ie, a 25,000 point award for domestic travel should be redeemed only if you would pay $500 or more for that ticket. Using that rule of thumb, the 80,000 points I redeemed for my roundtrip business elite tickets on Delta should be worth at least $1600. After booking my award flight, I checked, and the same itinerary would have cost over $6000.<BR><BR>Consumers may choose to spend more or less for a product, but the important thing is to be informed about true costs. Essentially, that's what the author of this thread started out saying--he hadn't done his homework and may have made a wrong choice. I'm trying to say that his choice was probably not as expensive as he may initially have thought, since there was no way to avoid at least a 1% charge.

Patrick

I really don't want to start another of those big debates about time shares. And as I said if you enjoy having one then fine, that's all important. But since you state you &quot;want to understand&quot; my point, TC, I'll try to explain it.<BR><BR>There is no doubt in the world that timeshares are a bad investment financially. You mentioned buying a house and not worrying about the mortgage rate. But to compare it to what I was talking about, I'd say that if I bought a house totally disregarding the future of the value of the house -- for example buying a house for $200,000 when all the same houses in the neighborhood are going for half that price, and having just found out that a huge smelly factory is being built right in the back yard -- then that would indicate I really don't care about the financial &quot;smartness&quot; of my purchase. And if I were willing to spend double for a house, showing my disregard for financial potential, then in that case I probably wouldn't be knocking myself out looking to save a point or two or on the mortgage, because clearly the money isn't important to me.<BR><BR>

TC

Trust me, Patrick - large ocean front, fully furnished, condos with room to sleep four people, a full American kitchen, a living room and a dining room, a balcony the size of Rhode Island, a fully paid house staff, homeowners insurance and an annual redecorating budget, not to mention a pool, water toys, and just for fun - free massages are NOT selling for half the price of what I paid to be able to spend a month there every year for the rest of my life. There is no smelly factory going up nearby - only exquist ocean views for miles and miles. I do not need to hop a plane to board up the place every time a hurricane drifts through, I don't have to paint it, fix it or worry about it. I just get to enjoy it.<BR><BR>I've owned vacation homes and sailboats and neither was a good investment. Now I pay for what I use and let someone else take the depreciation. I've learned that while owning something may look like the best investment on paper, it doesn't always work out that way in dollars and cents or emotional fatigue.<BR><BR>But again, that isn't the point of this discussion. Whatever I bought - regardless of value - I have a right to discuss the merits of financial charges on that purchase. It really makes no difference WHAT I bought, I'm only debating the cost of processing the transaction of the money for that purchase. Your point still doesn't hold up - if I can afford a purchase that (in your opinion)is unsound, I must be stupid and if I'm stupid about my purchase, I must be stupid about all money matters, so what difference does it make if she's ripped off for a few dollars more? Would your post have been different if I had said I bought a house or a Picasso or donated the money to charity? If I had made (in your opinion) an extremely wise investment in my purchase, would my point about American Express foreign currency exchange rates have been more valid?