xyz123

coco...

It is not clear if it is going up or not...the article did not say visa (or mc) is dropping the 1% conversion fee rather it says they are extending the 1% fee to cover all foreign currency transactions even those in USD...

Now Citibank (and others) jump in and say yes we will charge now 3% on the amount we receive through the international system...in other words it almost seems that the fee will now be 4%...murkier than ever.

mikemo

We discussed the "dynamic conversions" last July on these forums - most experienced travelers thought me delusional when I brought up the issue:
CC charges being converted to USDs overseas at the point of payment with a ridiculously unfavorable exchange rate - 4/18 last July in the UK and PT - I sent all back and refused to pay until priced in local currency.
The merchants were cranky as h..., but did as told. I can only asssume the merchants get a cut of the scam.
M

Sue4

This is all so confusing! I usually use my AA Citicard while travelling (for the miles), but now maybe I'll switch to my MBNA card. I haven't gotten any recent notice from Citibank (or maybe I just tossed without reading - I'm prone to do that with anything from banks!)

I do recall getting something in the last several months re a class action against American Express - wanted to know if I had traveled abroad within certain dates,and used AMEX. I returned the form - so maybe I'll get my 50 cents class action award!

LoveItaly

IMHO Mikemo is the one that understands all this credit card confusion. He has posted so many times. trying to help travellers.

I agree with him, USAA, at least at this posting, is the best credit card to use. They offer Visa and MasterCard.
You do NOT have to be a member of USAA to obtain their credit card as long as your credit rating is acceptable to USAA.

I think since the class action suit again American Express (which I responded to) all the banks are sending notices regarding their fees. Whether the are the same fees as in the past or whether they are just making them clear now because of the class action suit against American Express I honestly do not know.

I have an airline frequent flyer card. In the past I would have used that for credit card charges while in Italy. But in lieu of the 3 to 4% charges that most credit cards are charging I will, the next time in Italy, use my USAA credit card. That is of course if USAA still has the same program they have now.

It certainly does get confusing.

Travelling, whether it is airport security, airline rules, credit card charges etc. takes a bit of the relaxtion away from planning a trip. Then there is always the question; what do I pack?

Happy travels everyone

tmt

Capital One does apply a fee, however they do it by just jacking up the price of the exchange rate of the money. It turns out to be 2percent as of last Fall. Oh, as I remember, Capital One said it may be their passing on the costs charged to them by Visa. I didn't just ask the question, I asked why my hotel bill for the week was so high to begin with was even higher. It took a long time on the phone with Cap One rep who actually got a Visa rep on the phone with the 2 of us....he said he wanted to know too for his upcoming trip to South America!

Taylor

huebie

This topic has been discussed for a long time on the AOL boards. Many credit card issuers add the 2 or 3%. As of now, all MC and VISA add the 1%; the trick is to find a card that doesn't add the extra amount. State Farm VISA doesn't add an additional amount and neither did MBNA the last time I checked. The worst I found was Chase Freedom; they add the 2% on top of the amount after the 1% is added so it is actually more than 2%. That may not sound like much, but added to a $1000 or so hotel bill, it adds up. Unbelievably, once when I called to check on the conversion amount, the agent told me that the conversion amount "didn't matter, because it's just rolled into the charge. You never notice it."

damama

I started reading this thinking maybe we should send the link to Citibank to see how much discussion their charges get. Anyway, Coco's response has me confused. It is my understanding, whether it is a 1% only charged by Visa or MC plus whatever your bank charges, that is a fee to do the conversion, not the conversion itself, which is whatever the rate is when the charge hits the bank. Am I wrong? Misunderstanding Coco or what? By the way, if you have a credit union, try that. Mine doesn't charge anything about the 1%

Patrick

All right folks, I couldn't stand this another minute, so I did the big move. I actually picked up a phone and called Citibank and spoke to a "foreign purchases counselor". After a brief discussion, he advised me that "yes, Citibank has increased their charge from the 2% they used to do, to 3% and that is in addition to the 1% imposed by Visa or Master Card." When I asked specifically, "so it is a total of 4% charge on all foreign purchases?" he confirmed clearly "yes, that's right."

So, continue to speculate all you want. That's the word from the "horse's mouth", so to speak.

TexasAggie

Thanks for doing our homework for us and clearing it up Patrick

SusanP

I received notices about the increase from both Citi and Chase. I think it was Chase that specified that the new 3% charge will be applied after the conversion to US$. I don't know for sure, but I think this means you would pay even more, since the exchange rate is not in our favor right now. I don't plan to use this card in Europe anyway.

Haven't heard anything yet from Capital One. I was hoping they weren't going to do this increase.

xyz123

There is still a bit of confusion going on about this and thank you Patrick because I suspected as such...

However the arrogance of these banks know no bounds. What are you paying for with this 3% or whatever...I read the San Francisco Examiner article whose link was posted earlier in the thread and there are several questions unanswered..

Most importantly all these new disclosures no longer indicate that visa or mastercard will add 1% to the interbank rate. Rather they say that visa or mastercard will chose from among the rates available to them on a given day for the conversion and then the extra fee will be added. Are visa dn mastercard still adding 1%? Or are they adding whatever they want and then Citi and Chase are tacking on another 3% which the class action suit is forcing them to disclose...

In addition, Chase at least, has the gall to state that they will apply the 3% fee to any foreign charge even if it is written up in US dollars to go after the dynamic currency conversion crowd. Citibank leaves this unsaid...the article in the San Francisco paper seems to say, and anybody is welcome to correct me if I can't read, that Visa will now be adding an additional fee even if the charge is written up in US dollars. but if the charge has been converted, what foreign exchange risks do visa and the banks have which is obstensibly the reason for these surcharges in the first place?

You know merchants are prohibited from surcharging credit card purchases, even though some illegally do....now the banks and visa are doing something they specifically prohibit merchants from doing that is imposing a surcharge on 1 class of purchases those made in foreign countries. What's next, surcharges on airline charges? Or on train charges? Or on jewelry charges? or on electronic purchases? or fast food purchases?

What a bunch of malarkey they are pulling on us....I would hope the government (fat chance with what they bribe government officials with) will do something for once to protect consumers and not the banks but I wouldn't hold my breath.

LoveItaly

In Italy some hotels and smaller businesses will give one a discount if they pay cash.

So perhaps a good way to save money is to use the ATM and pay cash when you can receive a discount.

RJD

Please note that any holder of a Citi card can opt out of the increased foreign transaction fee. You still get to use the card until it's expiration date. Last paragraph in the Notice.

clevelandbrown

In defense of the banks, weak as it is, they do have some additional costs when people use their credit cards overseas, and those costs relate to providing customer service to us while we are overseas. It costs more to maintain a world-wide toll free number than to maintain one limited to the US, or even North America. I don't think is is worth the whole new fees they are imposing, but my observation is that many of the institutions that add on no fees are those which are owned by their customers (such as credit unions and, to a degree, USAA) and are providing a service to their customers, rather than trying to maximize profit for the shareholders.

I don't see that there is any pressure on the banks that impose the fees, as so many of us indicate that the most we will do is to stop using that card for the few weeks that we are overseas. If we want to exert pressure to get the fees removed, or at least moderated, we should get cards from an institution that does not charge fees, and return our cards, mutilated and accompanied by a letter of complaint, to those institutions that are overcharging. Credit cards are a major profit center for all banks, and even if only those few of us who travel return our cards, the banks will be driven by competitive pressure to act more reasonably.

xyz123

Many years ago, NY State had a law which prohibited banks from putting annual fees on credit cards...Citibank tried to find a way around it by establishing a 50 cent minimum finance charge/month which NY courts eventually found illegal. Of course, the Supreme Court then ruled that bank credit card operations were tied into where the bank was located not where the customer lived so Citibank and all the rest of them moved their credit card operations to South Dakota and Delaware and began charging annual fees.

Then along came AT&T which promised charter members of their credit card operations they would never impose an annual fee. Many people migrated to them and the banks were forced to drop annual fees. Today, except for the airline cards, no bank puts an annual fee on its credit cards. Some old cards do, but if you call the credit card company the month the annual fee is applied, and threaten to move to another bank, they will always waive the annual fee (again Amex is different although optima cards are free and the airline cards are different).

About 10 years ago, a bank called Providian begain charging fees as high as 5% for foreign currency transactions. Nobody left so the other banks caught on and slowly but surely they began imposing the 2% fee. They never could and never have spelled out what it was for. Some claimed it was for their protection against foreign currency fluctuations but that is the purpose of the 1% fee that visa/mc imposed. The banks received the charges already converted and thus never had any foreign currency exchange expenses but nonetheless they began imposing these fees. The problem was that stupid people never stopped using their cards and never went with the few banks that did not pull this garbage. Of course much of it is because people are stupid and think mastercard or visa is imposing the fees. They don't understand that every bank is different and they don't have a visa card, they have a citibank visa card. They accept when moronic customer service reps tell them the imposition of these fees is a normal practice yada yada yada.

The fact is that it is a crock of you know what that foreign transactions cost more. There is much more fraud on internet transactions which cost the banks zillions. Do they impose a surcharge on internet transactins? Airline charges lead to loads of customer service inquiries and problemss; do they charge more? When an airline goes bankrupt and goes out of business, the banks are left with the bill as they have to reimburse customers and then become creditors of the airline. do they surcharge airline transactions?

They rely on the stupidity of people, people who don't realize they are being ripped off for no reason and who continue to use these near criminal enterprises and throw money away. If people all simply stopped using citibank or chase or bank of america or first usa for foreign card transactions and made it clear to the banks they were doing it only because of this near criminal rip off, you would see that this fee would have been still born. But now that banks see they are making a bundle on it, they just jack up the fees.

And guess what, lots of stupid people will continue to pay these fees and let the banks get away with it.

Of course the latest insult is not that they are increasing the fee to 3%, but now they intend to charge the fee even when foreign charges are written up in US dollars where no currency transaction on their end takes place.

Anybody who uses any of these cards from these near criminal banks is kind of nuts; at least in my humble opinion.

djkbooks

Patrick: "All right folks, I couldn't stand this another minute, so I did the big move. I actually picked up a phone and called Citibank and spoke to a "foreign purchases counselor". After a brief discussion, he advised me that "yes, Citibank has increased their charge from the 2% they used to do, to 3% and that is in addition to the 1% imposed by Visa or Master Card." When I asked specifically, "so it is a total of 4% charge on all foreign purchases?" he confirmed clearly "yes, that's right."

Still confusing though - is there a 3% currency conversion charge on all transactions AND an additional 3% FINANCE CHARGE, or just one or the other?

djkbooks

The leaflet I read from Citibank (though I don't have it handy) indicated that you could opt out, but your account would be closed.

workerbee

Hello

This is my first post. After reading all of the posts on this problem, does anyone have any idea what card or bank we should be using?
My daughter is going to London for the summer for an internship for 21/2 months. Any suggestions for banking and charge cards would be very helpful. In 2002 we used Citibank but obviously can't now.
Thanks

Patrick

djkbooks, there is NO finance charge to my knowledge on any of the transactions, unless you don't pay your balance when due, then your finance charge is up to whatever rate is set by your card.

nibblette

Agree with clevelandbrown. Not using the citibank, chase, etc. overseas but using them every other chance DOES NOT really send a message. You are still supporting their policy, but in a more subtle way, by continuing to patronize their cards otherwise.

The best way to send a message is to STOP using their cards completely. Don't give them ANY business. And tell them why you are cancelling the cards and switching to MBNA, USAA, etc. If enough people do it, they will get the message (like with the annual fees). The traveling public is HUGE. I think we could get some of the banks to change their policies.

I cancelled my Chase card years ago when they first started the extra fees and told them I was switching to MBNA and why.