Currency Conversion fees
 

Sandi's note in another thread (T-word) is very timely. I just received my latest Visa bill and, for a business trip to Canada, noticed that my Visa card is now charging the 3% sandi mentioned. It was 1% the month before for a trip to Mexico.

I'm now searching for a card that is at the old rate of 1%.

What are others paying for currency conversion fees?

We just got a notice that Citibank was required to post 3%. They had always charged that but didn't reflect it on your statement. Now they do. The actual charges didn't change, just the way they reflect it. (According to them.) Liz

My understanding with the Citibank situation is the same as Liz. Citibank has always charged a conversion fee of 3% (actually 2% from Citibank and 1% from Visa/MC) but they are now required to disclose this. I don't think it went up but I'll keep an eye on the conversion fees next time I have foreign charges.

Amex charges 2% and always has, but I just noticed recently when logging into my account online that they have a very prominent notice regarding this fee on my statement now. It wasn't clearly disclosed before.

I believe MBNA and Capital One are the only cards which do not add their own conversion fees (they just pass on the standard 1% from Visa/MC).

I have a Visa through Target - Target National Bank. I've just talked to them and they are still charging the 1%. The downside is that it is not a card that you can earn miles or points on....

I also have a card through a credit union that also still charges the 1%. And, they've just introduced a card that does earn points.

Ok, this is the deal from two different Citibank reps. Citibank has up to this recent notice, previously charged 3% for Foreign Currency Exchange when using their card overseas. The 3% was allocated - 2% for Citibank, 1% Visa/MC. NOW, Citibank has increased their percentage to 3%; the 1% Visa/MC remains unchanged. The new total for Foreign Conversion is 4%.

From my own experience at the old rate, our charges with our credit card versus using an ATM card/machine were practically the same, and we know that the ATM offers the best rate. The difference in .0000 (whatever) was so small that it amounted to "pennies" - in other words, not much.

As to the mention above that Amex only charges 2%, I can only comment on what happened to a friend who split between Citi and Amex, a charge in Euro for a hotel bill in Italy - both done at the same time. Surprise, surprise, but the Amex amount on his statement was actually a few hundred, yesss, hundred dollars more. Of course, he contacted Amex for an adjustment. One would think with 2% Amex vs 3% Citi, the Citi bill would be higher - it wasn't.

So I would suggest that everyone check their credit card bills very closely regardless whom the financial institution.

On the Europe Board, there was a comment made regarding this subject stating that even if charging USD overseas, there would be a Foreign Exchange Conversion Fee!!! Duh! For dollars, NOT! Citibank says this is not the case - dollars are dollars wherever one charges them.

Something to consider for travelers to East Africa - some establishments may offer to charge your credit card in USD. They will convert using a rate, often as favorable as the official rate and for the establishment; if you feel it is equally favorable - then have them convert in-country and charge your account in USD. Figure which works best for you.

sandi,
As to the incident with your friend's hotel bill in Italy, I would venture to guess that there must have been some kind of error made by the hotel or Amex to account for several hundred dollars difference (unless his original hotel bill was in the six figure euro range ;) ). In all of the years that I've used my Amex and Citi cards abroad, I've never found Amex's conversion to be higher than Citi when comparing charges from the same day.

I agree with you that the overall difference is not that great anyway. I would still rather pay slightly more and earn miles than earn no miles.

Patty
Of course, there was an error with the Amex conversion rate, which we didn't wonder where they got whatever numbers from... but it was corrected. Surprisingly, though when they did "correct" the rate, while it came out less then Citi, it was a bit more than the 2%. Everyone has to be diligent in checking those statements when they arrive and clear up any conflicts immediately.

Sandi and Patty - I too have checked my statements and believe credit card companies pick and choose what conversion rate suits them. On some occasions they use the rate in effect at the time I've made a charge. Other times they use the rate at the time they sent my statement. Always favoring them of course.

Sometimes, like sandi's friend's Italian incident, I haven't been able to figure out what rate they used at all (never so egregious a difference though). In those cases I've called and gotten some credit. It usually doesn't amount to a great deal of money, but think of all the cardholders and all the charges made. If Amex, Citi, USBank, or whoever, can pick the best timing on conversion, they could be making a tidy sum just on the potential rate spread during the charge to statement period.