Credit card: international transaction fees?
 

My current mileage credit card charges an international transaction fee for purchases, such as hotels, booked through international companies, such as sawasdee.com. Wondering if you have a CC that does not have those, or is that standard for the industry?

Also, are those fees (a percentage?) applied to all transactions made overseas? I'd love to get around that, especially in light of upcoming travels.

Thanks!

This is a pretty recent charge that credit cards have instituted. I have not yet found one credit card that doesn't charge the fee and it is for all purchases including those while you are away. Sorry for the news.

My Capital One Visa card does not charge any fees. At one time about a year ago, the talked of a 1% fee - but we have traveled internationally 4 times since then and there has never been a fee. Last trip was in May, unless they have changed since then.

Almost all banks charge a 1% fee on the exchange rate (credit cards and ATMs both). Often, those are not itemized on your statement. In addition, many (most) cards are now charging an additional 2% (which is itemized on your statement) which is simply pure profit for them. If you can find a card that doesn't charge, it can make a difference. On the other hand, if your card gets you good benefits (miles or rebates) you may want to use your card in spite of teh surcahrge.

Connette, I'd heard from others that Capital One doesn't levy that charge.

My bank has just started that charge on ATM withdrawals. I'm opening a new account elsewhere to escape that charge!

Kathie, will you share the bank you decide on to get around the charge for ATM withdrawals?

Connette, do you use the Capital One rapid rewards card? Have you had any experience with redeeming the rewards? I've been thing about changing over for a while. And since I just found out that my B of A card charges a 3% (all of it unitemized) international transaction fee, I am even more inclined to do so.

Thanks for your help!

I've opened an account at HSBC. They have branches in many countries, including a branch in Thailand and a number in Malaysia. They have told me that they don't levy the extra 2% on ATM withdrawals, and they only charge you what they are charged for your use of a foreign ATM (typically $1.50). And right now, they have an internet savings account that pays 5%. I'm putting my vacation cash in there and will withdraw it as needed.

Laurieco had previously recommended them.

for many many years american express was the only one who charged an extra fee and it was 2%....then others started....then mastercard international and visa international, the parent companies implemented a 1% foreign exchange fee...

some banks burried these in their conversion rate....then some started to show them as a seperate transaction...

most if not all have the international 1% fee and then add their own 1-3% fee on top...they often show as a seperate charge on your account....when buying something expensive, it adds up quickly...

my brooks brothers card charges not fee at all, strangely enough....its a mastercard....

mbna used not to charge anything, then they added the 1% and now their cards are up to 3%...i ditched some for this reason...

i have now been over 5 min pushing buttons on the capital one site (telephone) to chech their rules...finally a menu offering a rep to speak to....now she has put me on hold-----answer: there is no fee for foreign transactions.....a great card...

i have had a cap one a/c for many years and they are very competetive...

Great. Thanks both Bob and Kathie! Very valuable information ($$ literally!)

Also looks as if Capital One has no annual fee.

no annual fee and the % rate is usually quite low....mine is 9.9% across the board...

Last time we traveled and I made the obligatory call to tell them we would be out of the country - I inquired again about the 1% fee. They acted like I was crazy and said they have never considered charging a fee. I distinctly remember receiving correspondence in the mail from them saying the were going to start to charge 1% and being told we would be charged 1% about a year earlier when we went to Peru. But, we have never been charged the 1%

So I guessed that either they received a lot of flack and changed their minds, or somehow we were grandfathered in, as we have had this card forever.

You do get miles with it too (no fee), and they say there is never any blackout and that you can use them on any airline - but twice when we tried we were denied for some silly rule or another. So the last time, we just asked for a check instead. Instead of using the 35,000 miles we had accrued at the time - they sent us a check for $350.00. That might have not been the smartest as maybe we could have used them later - but I was mad after being denied on the "no hassle" bla bla bla twice.

Sorry if this is showing up more than once. I saw this posted when I originally wrote it - then it was gone. When I went to write it again to answer lovesadventure - there it was on the side. Weird.

I was probably posting the same time as you. We were successful redeeming twice. And, at that time they required only 15-20,000 miles. It was a great deal. Now they require more miles and we were shot down twice.

The last time it was ridiculous. It was open jaw and the second leg was closer to our home city than the first leg. If it would have been the other way around - we would have had success. I don't call that no hassle. I felt very hassled.

For those who say they "don't get charged the 1% fee", the only prove-positive way to confirm that is to find out the actual exchange rate for that particular day, and then compare that with the rate listed on your CC statement.

Virtually all credit cards embed that 1% in the exchange rate, so there's no extra charge. The cards that charge the other 1-3% <b>on top</b> of that 1% will usually list that seperately.

I have not heard of any credit card that do not charge you that 1%.

connette---what card are you talking about...

cap one claims not charge....brooks bths not charge....exact daily exchange rate both in thailand and italy on my card...

I have a Visa Debit card which means you use your own funds and draw against them. There are no charges for international transactions.

Capital One Visa. No charge. No 1% fee - ever. Sorry for any confusion. I am quite sure of this. We have been places (like restaurants) where the receipt is shown in US $ as well the local currency. No fee was charged with that charge or anywhere on the bill. And the monthly statement showed both currencies as well.

I like the card just fine. It is just that is used to be better as far as redeeming miles. Less miles necessary and no denial of redemption. Now it takes TWICE as many miles for some flights and there is not only a hassle on the no hassle card - we have been denied twice on flights we were trying to book.

But, you can always get a check from them instead of miles for 1% of your accrual of purchases. It is just like Discover Card, which is my favorite, but will not work outside of the US. If we get denied again, we will just continue to get a check from them. It only takes about 1-2 weeks to reach you by mail.

Kingbonza, whether your debit card charges a conversion fee depends on the financial institution you are with. Note that many debit cards do not work in some countries. Also, you do not have much fraud protection on a debit card - someone can empty your bank account quickly. I never use a debit card, and have the bank issue me an ATM only card,

Kathie, I only move funds into my debit account before I use it. normally there is no balance in the account. A quick transfer on the internet and its ready to go. If anyone tries to use the account there is no money in it.

Be very specific when you contact your credit card companies. I asked my bank if they charge an internatonal transaction fee. They said no. However, when I returned home my bill had a transaction fee. I called my bank and they said they did not charge the fee, VISA assessed the fee. So technically the bank did not. I was so pis**d off.

Good point! I also just read in a disclosure statement from a bank that all banks charge the 1% fee, thoug it is often not shown, as it's a charge levied by the bank clearing house that exchanges money. So while it may not be possible to avoid that fee (and often bank employess are clueless about this), it is possible to avoid fees on top of that.

Kathie is correct. All VISA &amp; M/C charge the 1% it is charged by the brand not the bank that issues the card. We have a no fee Plat M/C card through USAA which we use for Car rentals and purchases overseas and they do not charge anything additional above the 1% charged by VISA and M/C.
Sue

I have a Capital One Visa and it does charge the 1% for the Visa, but there is not the additional 2-3% charged by Chase, Citibank, etc.

My one complaint is that I got a $5000 limit, and Capital One will not increase the limit. Received a letter that cards are reviewed periodically, and Capital One decided when and if the limit will be increased. Customers cannot request an increase. After being with them for several years and paying the bills in full every month, I still do not qualify for a higher limit. Go figure!!!

I am beginning to wonder if there is more than one type of Capital One Visa. For one thing, we have never had a problem increasing our limit. We have had the card for well over 10 years though. I am wondering if we have some other sort of account and/or if we are grandfathered in on the no transaction fee. It is a business owner credit card. Could that be the difference?

I am currently looking at a receipt from Budapest in May. I have both the first receipt given by the waiter, the visa receipt you sign and my statement. All three have the amount in US $ and Hungarian
Forint and all are exactly the same. There is also no added fees to the statement whatsoever and of course we had many charges while traveling. Like I said, possibly it is because it is a business credit card, which I actually never thought of before.

Connette, It sounds like you have a Capital One card that doesn't charge additional fees (great! rare to find)on foreign exchange. But Visa or Mastercard charges the 1% fee and it doesn't show up on your statement, it's just rolled into the exchange rate. It wouldn't matter whether it is a business card or not, the 1% charge is made by MC/Visa and doesn't have anything to do with Capital One.

Something else. I have my Debit card through the same bank. When I used this to purchase items no VISA fee was charged. Furthermore, the best advice I was given is use the ATM to get local funds whenever possible. The exchange rate through the ATM is much better than exchanging cash or Travellers Checks. Even with the $1.00 fee. This is because when using the ATM you get the bank to bank exchange rate which is better than the rate charged at money changers. The difference between the bank to bank rate and the rate charged at money changers is their profit.

Sorry Kathie, but it is not rolled into the exchange rate. I know this because if I would have paid cash to the restaurant(s) (I have many receipts), I would have paid the same amount that was charged to my card.

I did not believe it at first either, as I thought I received correspondence from Capital One saying that they were going to start adding a 1% fee.

I have carefully checked about 4 statements total, traveling to central Europe and South America in particular. It is easy to do in both of those areas, because many receipts show both U.S. and local currency. If it says my bill for lunch is $15.00 U.S. and that is the amount on my statement, it really leaves no doubt that is what has been charged. Not trying to be contrary - just a fact.

You are right, it is a great card. Miles, and/or cash back and no fee. Still like my Discover Card better though and only use visa when they don't take Discover.

Connete, it sounds like you must have a great deal!

Baltorep, I have (in the past) always used my ATM card, and never had the extra fees added... unitl a few months ago. Which is what made me go look for other options. I now have an online savings account that pays a bit over 5% interest, and does not have the added fees other than $150 for a foreign ATM. SO my vacation cash is going into that account.

P.S. Banks do charge THE MERCHANT a 1% fee. I happen to know Discover Card charges the merchant 2-3%. That is why many places don't take it. Is that what disclosure you read Kathie? This is not just abroad, but in the U.S. as well.

For those cards that charge a Foreign Currency Exchange fee, they have to indicate this as separate from your actual charge/s. This all came from a Class Action suit some years back, where the banks were including this fee in the actual charge at a restaurant, shop or elsewhere. So it is against the law to do the latter... it must show up on your statements on a separate line. And, if by some chance the vendor of service bills you in your home currency, i.e., USD, you still get hit with the Foreign Currency Exchange fee.

The few times we've used a credit card for purchases, this Foreign Currency Exchange fee was pennies. Unless you're spending big bucks, it's always best to use local currency obtained from an ATM which provides the best exchange rate. And, if your bank applies an ATM charge, take out sufficient funds to keep you going for more than one day... maybe five days or a week. I certainly don't go to the ATM daily at home, why should I do so in a foreign country.

Thankfully, my bank doesn't charge foreign ATM fees. In the end, if you don't like paying extra for any of these, it's time to be shopping around elsewhere. Unless, however, you're constantly traveling oversees and using ATMs or credit cards... in the scheme of things, your cost for the once or twice-a-year trip... these charges are really not all that much, and if you get FF miles, why knock yourself out.

Connette, the credit card companies do charge merchants a fee all over the world. I'm not talking about that. There are two kinds of charges I am talking about that apply ONLY to foreign exchange.

First, there is a standard 1% charge that the banks are charged by the clearinghouse for foreign exchange (whether for a credit, debit or ATM transaction). It used to be that one never saw this itemized on the bank or credit card statement. My most recent ATM withdrawal in Canada showed this charge (to my suprise). My understanding is that all banks are charged this clearing house fee and there is no way to get around it. It didn't used to be itemized on my statements from my bank or credit card companies, and I don't know whether all banks are now itemizing it or not.

Next, there are fees charged you by your credit card company or bank in additon to the standard 1% fee. The class action lawsuit was about these fees, and the law is that these fees must be itemized. This has been true for a number of years. Most credit card companies charge these fees. In the past, few banks charged these fees on ATM withdrawals, so it made geeting money from an ATM a &quot;better deal&quot; than using a credit card. (Though I've always used credit cards for large purchases and hotel bills and such.) On my most recent trip to Canada, my bank charged by account an additonal 2% foreign exchange fee for my ATM withdrawal (on top of the 1% standard fee charged by teh clearinghouse). That's what really suprised me. My bank has never made this charge before. As a result, I decided to find a bank account that would not levy that charge on ATM withdrawals.

When the extra fee to use an ATM or credit card in foreign countries was just the 1%, I didn't mind. Because you were getting the &quot;bank rate&quot; on foreign exchange, you often did better than changing cash at an exchange booth or exchanging travelers checks. The additional 2% on top of that does make me pause and consider my options. The 2% meant that I was charged an additonal $5 on my ATM withdrawal in Canada (in additon to a $2 ATM fee and $2.50 in the clearinghouse charges).

My credit card bills from that little jaunt added another $15 in clearinghouse fees and $30 in foreign exchange fees to the credit card companies. But I do get either frequent flier miles or cash back (2% on hotels and air tickets; 3% on restaurants) on my credit card purchases.

Credit Card News www.indexcreditcards.com
(Last Updated April 3, 2006)

Survey Finds Wide Variance in International Credit Card Transaction Fees
With business travel having become increasingly global in nature, and with the summer travel season approaching, IndexCreditCards.com researched the major U.S. credit card issuers to discover the extra fees cardholders can expect when using their cards overseas.

Almost every credit card charges some sort of international transaction fee on purchases overseas. Visa and MasterCard charge a 1% processing fee on international transactions, and most card-issuing banks add their own fees on top of that. These fees, known as international transaction fees or foreign transaction fees, are generally a percentage of your overall purchase price (in U.S. dollars after the foreign currency exchange; for example, if a purchase costing 100 Euro in France converts to $120 in U.S. currency, the international transaction fee is a percentage of the $120).

How do the major credit card issuers stack up? Below are the international transaction fees from each issuer:

* Capital One: 0% transaction fee. (Capital One not only doesn't impose its own fee, but it also eats the 1% fee that Visa or MasterCard impose.)
* Providian: 1% transaction fee
* American Express: 2%
* Juniper Bank (issuer of US Airways credit card and other partner-branded cards): 2%
* Bank of America: 3%
* Chase: 3%
* Citibank: 3%
* HSBC: 1%-3% depending on card (Updated 4/3/06)
* MBNA: 3%
* U.S. Bancorp (U.S. Bank): 3%
* Wells Fargo: 3%

While Discover offers a popular credit card in the United States, it is rarely if ever accepted overseas and thus is not included in the above list. While some smaller card issuers may offer more favorable foreign transaction fees, this survey attempts to track the credit cards most commonly used by U.S. consumers.

Thanks a lot for this website! I just went there and clicked on more recent reports and found the following. My question is, &quot;Where do I go to collect my part of the class action payout?!&quot;

July 26, 2006

Credit Card Companies Settle Currency Conversion Lawsuit for $336 Million
Associated Press reports that a lawsuit against major credit card companies is being settled, with the companies agreeing to pay a $336 million dollar settlement. The suit alleged that the companies were overcharging and hiding fees on international credit card transactions. The credit card companies did not admit to wrongdoing in settling the case.

MasterCard said it was paying $72.48 million of the overall settlement. Other companies agreeing to make the remainder of the payment include Visa, Citigroup's Diner's Club and Citibank units, Bank of America, JPMorgan Chase, and Washington Mutual (from its Providian unit).

Becalm, thanks for this! Connette really does have a good deal!

My understanding is that banks now are required to show their charges on foreign exchanges. This amount used to be deducted, but did not show up on your statement. I believe that including the bank charges (for foreign exchange) credit cards still give the best exchange rates.

some do some do not...like amex does not

Bob, my Am Ex statement shows the fees for foreign exchange. They started printing them on my statement before my Visa card did. They were one of the early credit card companies to comply with the new rule.

Becalm, thanks a lot for those percentages! I just signed up for a Capital One card since I tend to live off my Citibank or MBNA credit cards when I travel and didn't realize until now just how much extra I was paying.

I just got &quot;approved&quot; for my Capital One rewards card--looks like I get double points also. It's the Ultra Miles card.

And am applying for my HSBC online savings account. It pays 5%+ interest as well as not having the additional % charge for the ATM withdrawals (so far as I can tell).

Thanks for all the great information, group!

There is another side of CapitalOne that I feel obligated to mention, as experienced by myself, my wife and a friend, on both personal and business cards.
- They seem to take advantage of every reason to charge us penelies/fees. These fees also seem to be higher than many other cards. There have been some disgruntled users (LOL, not me) posting on the net.
- It is CapitalOne's written policy not to waive fees they assess regardless of circumstances. For instance, a ($29?) late fee on a balance of $1.52 which arrived 2 days late. (This was a first time for a late payment w/their cards by me).
- They appear to impose a low limit on their cards of $5,000, despite impeccible credit ratings and debt-free status (Our other cards have many times this this limit including AMEX). This could be an effort to impose a ($35?) over-limit fee which we incurred on my wife's CapitalOne business card.

CapitalOne? Caveat Emptor.

lovesadventure, I believe HSBC does impose the 1% fee, though I've gotten different answers from people on this matter. Everyone agrees it doesn't charge any additional fees. In any case the 5%+ interest is a good deal, and I plan to make that account my vacation account.

Thanks for the warning. I only plan on using the CapitalOne card for travel purchases though, as I normally use my CitiCard otherwise with its 0% APR on purchases. So long as the ATMs in SEA accept my Visa debit card, I won't be needing the CapitalOne card for cash advances.