12perfectdays,

<The CSR that tried to sign me up told me that it was 3% BUT it was not USAA, the 1% was from mastercard for the conversion BUT THE OTHER 2% WAS FROM THE MERCHANT>

I think the CSR gave you the correct answer, but here's what I believe actually happened:

On my trip to Ireland last May, several merchants were doing the conversion from Euro to Dollars on my purchases instead of charging my purchases in Euros. By doing this I later learned they tacked on the additional 2% conversion fee.

When I got home, I checked the interbank rate for the day I made the purchases, and the merchant tacked on 3% (1% for the Mastercard conversion fee, and 2% for the merchant).

Lesson learned -- <b>Insist on being charged for purchases in the local currency</b> -- then your only cost will be the 1% Mastercard conversion fee.

I understand this (I'm going to call it a scam) thingy is spreading to other European countries.

Insist all credit card purchases be in the local currency. 2% here and 2% there can add up fast.

Hi Budman...
&lt;&lt;When I got home, I checked the interbank rate for the day I made the purchases, and the merchant tacked on 3% (1% for the Mastercard conversion fee, and 2% for the merchant).&gt;&gt;

My understanding is that no matter the currency there will be a 1% fee from mastercard or visa plus the 2% bank fee (where your card originates from) no matter what currency you are charged at time of transaction. This total of 3% is reflected on your monthly statement.

Then, if you are charges USD instead of Euro at the time of purchase the merchant would get a few extra % by charging an elevated conversion rate.

10Euro charge on billing statement converted to $13USD plus the 3%= $13.39
or
10Euro converted at purchase is charged $13.50USD plus the 3% on your billing statement= $13.91

Since this has just started and I have time I am waiting for someone to post after they are back and see their statement. There is so much confusion with info people are getting from the MC/Visa people, URGH!

Have a great time in Kauai next month, I await your current view of the Islander!

Our credit union has never charged any fees for withdrawals from overseas ATMs. Just make sure if you join a credit union just to travel that they are part of a large network like PLUS or Cirrus which have ATMs all over Europe. Our Bank One CC, that recently morphed into Chase, charges 3% over the exchange rate, however we accrue miles on United with our purchases (which add up fast in European hotels) so we haven't looked for a card with a better rate. We just factor the 3% into the price of traveling. By the way, made the mistake of accidentally using my CC instead of ATM for a withdrawal. Obscene finance charges--almost $40 for a 300E withdrawal. Will never make that mistake again...

I'm with 12perfectdays -- when I called MBNA they said in May they'd be charging the former 1% plus a new 2% (for a total of 3%) on my foreign purchases, while AAA said I'd be charged only the 1% (by Visa) and my credit union said I'd be charged nothing additional at all.

Interesting. I've just caught up with an article in the money management section of last Saturday's Guardian all about UK banks discreetly racking up charges for overseas ATM withdrawals. Somehow the words 'cartel' and 'rip off' are wandering around my mind: but then, I'm a Guardian reader...

eurotraveler9,

&lt;Our credit union has never charged any fees for withdrawals from overseas ATMs.&gt;

None of my banks/credit unions charge an ATM fee either, but they all charge a conversion fees -- 1%. It's a shame that they are all going up a percent or 2.

&lt;By the way, made the mistake of accidentally using my CC instead of ATM for a withdrawal. Obscene finance charges--almost $40 for a 300E withdrawal.&gt;

WOW!!! I would get rid of that credit card. Yes, you do get charged interest from the day of withdrawl, but not $40 worth.

For example, 300 Euro at $1.3 = $390. If your credit card is as high as 18% APR, and you carry that balance for 30 days prior to paying it off, it will incur 1.5% interest for that month. That is only $5.85. What else are they hitting you up for? To put it in perspective, that is really peanuts compared with some of the ATM charges some banks charge.

12perfectdays: My MBNA MC statement received yesterday had the following charges from 4/10 and 4/12, post date 4/12 and 4/14:

14.50&euro;=$18.72
162.00&euro;=$209.19
51.40&euro;=$66.07

Seemed reasonable and I didn't note any extra fees. The remainder of our charges will hit next month's bill. It will be interesting to compare the two.

The recent disclosures are in advance of the effective date of any fee changes. I believe late May is the beginning of new charges.

Budman, on a Credit Card cash advance, there is a &quot;cash advance fee&quot;, on top of &quot;finance charge&quot; and &quot;foreign transaction fee&quot;. Yikes.

My USAA bank doesn't charge a &quot;cash advance&quot; fee, nor do they charge a conversion fee. MasterCard charges a 1% conversion fee.

Something interesting...

someone at my work gave me the May 2005 issue of Frommer's Budget Travel Magazine and on page 16 there was a question, I will type exactly what appeared below.

&quot;Citibank sent me a notice saying it's adding a 3% fee to transactions involving foreign currency. Is this an industry-wide trend?&quot;

Reply: &quot;When you use a credit card abroad, the credit card company adds 1% before handing it over to the bank servicing the card. It's up to the bank to decide how much more, if anything, to tack on. Citibank basically adds 2%. What's changing is simply the way that fee will show up on your statement. Two banks that don't charge additional fees on overseas purchases are Capital One (800/955-7070) and MBNA (800/932-2775).&quot;

hmmmm...we shall see!