Just received statement form my Continental MasterCard and they were charging 'foreign transaction fee' for all my uses of the card when vacationing in Switzerlan. This is the first time I ever saw this type of charge. Does anyone konw if Visa does the same type of charge? We travel outside of country almost once a year and this year is the first time I experience it. Very unhappy about this and thinking of cancelling this car. Can any one share their charge card stories? Thanks.

I believe they all do charge a fee for foreign transactions, except it's usually added into the charge and not displayed seperately. Before you cancel your card, please tell us what percentage you were charged and maybe we can tell you if it's reasonable.

Take a look at the Capital One thread on the US forum. CC companies are becoming very cagey.

Generally speaking all cards charge 1% for the currency exchange or trasaction fee, whether it is itemized separately or included in the total. Many cards, including most mileage cards add 2% additional to that charge, again which may or may not be itemized separately. Find out first of all what the total percent was.

Incidentally, one of my friends brags about her credit card which doesn't add any additional charges over the 1 %. Yet when we compared our bills after a trip together, there were several where we "split the bill" and her charge was equal or even higher than mine, despite them being taken at the same time, and despite my Citibank supposedly charging an extra 2%. Some may argue that maybe it was posted at different times, but since they were both taken on the same day and posted to our accounts on that same day, that's kind of hard to swallow. Sometimes I wonder if somehow the "no extra fee" cards are using a different exchange rate to begin with?

Visa is an organization that has a credit card brand. Individuals banks issue Visa cards, not the Visa organization itself.

The individual banks set the rules form their cards as they see fit and within the scope of prevailing credit card laws.

In terms of the Continental Visa, it's issued through Chase Manhattan Bank. It isn't unusual for Chase to tack on a Foreign Exchange fee for overseas purchases as they've done with my Chase Visa for several years.

If you want a card with no foreign exchange fee I suggest check around. But, I'm sure they'll be tradeoffs as most credit card companies like to emulate a competitor that has found a formula to increase their revenue.

Thanks all. I was charged for 2%. I think I will check on these types of rate before I travel to foreign countries next time. I did notice that my bank (Fleet) did not charge extra transaction fee for withdraw cash from ATM in Switzerland, and the exchage rate is about the same as the published rate.

A lot of this is in response to a suit the banks lost regarding disclosures of transaction fees for foreign charges.

Chase is one of the near criminal banks that adds a 2% charge for supposed foreign currency conversion. Of course it is near criminal as they have nothing to do with the currency conversion, it is already done by either MC or Visa and reaches your bank already converted. Chase is even worse, although it is pennies, as they apply the 2% not to the original charge before visa/mc adds the 1% but to the converted amount. Pennies to you but multiply by their millions of credit card customers and you have some real money to them.

To Patrick, there are 2 possibilities I can think of to your post that perhaps this is all a figment of somebody's imagination. I have checked very carefully. I do know that MBNA and USAA indeed use the intebank rate + 1% that passes along the MC or visa charge. Is it possible that one of the cc's used that day was a visa and the other a MC so they entered the cc system at different times? Or perhaps your friend was mistaken about his or her card. I know when I was last in London, the pound dropped somewhat against the dollar to the tune of almost 3 or 4 cents so the charges I made for £1.19 for sodas on Friday were several cents more expensive than the ones for £1.19 I made on Monday....I don't doubt at all your story but there really are differences in the exchange rates of the near criminal banks and the banks that simply pass along the 1%.

Nicolasl ????

Why not start your own thread? What does this have to do with the price of eggs in China?

Nicolasi is a sick human being who has nothing better to do with his time. The censors at Fodors should have put a stop to his imbecilic posts a long time ago.

If you click this name, you will see that this poster has a habit of doing long, rambling posts that have nothing to do with the original question.

Near criminal behavior for tacking a 2% fee onto a credit card charge. Please.

We live in a capitalist society (except by chance you're posting from North Korea.) The banks tacking a 2% fee on isn't criminal, it's called operating within the law to maximize their profits. That isn't criminal - it's America.

How is it that banks can offer 0% balance transfer options? How is it that banks can afford to expand who is eligible to even obtain a credit card? It's because they offset those items by making a profit elsewhere.

If a bank in its credit card disclosure statement says "Charges in a foreign currency will be assessed of fee of x%" and you then get angry because you failed to read the disclosure or ask as you were applying about that fee - why is that near criminal?

You want low balance transfer rates, you want easy access to credit, you want affinity programs that reward miles/points, you want 24-hour on demand customer service, you want as an investor your investment in financial stocks to generate a return (or your 401k if you do no direct investing), then charging customers 2% for a charge in Europe is part of the cost for that.

Every credit card I have owned has been accompanied by a statement of terms and conditions that explains exactly how they will handle overseas transactions, if they handle overseas transactions. I suspect everyone gets a similar statement, but we apparently never bother to read them, as this subject keeps surfacing.

If you want to know what charges your current card-issuer imposes, read the terms and conditions statement. If you are looking for a card-issuer with a good deal, ask for a copy of the terms and conditions statement. It also explains how they handle cash advances, and how payments are applied. Apparently the banks have found a place to hide this information, in plain view.

Ryan...

Banks prohibit merchants, at least in the US, for surcharging for use of a cc; so how come they surcharge one kind of charge without providing any service for it. To me, that's near criminal. I expect to pay for a service - they don't surcharge purchases from certain merchants say airlines or is that next? It is near criminal as they are not providing a service for this; the actual currency conversion is done by the mc/visa system. They receive the charge already having been converted into the home currency. As far as that is concerned, it makes no difference if the charge was incurred in New York or London or Timbuctoo. That is why it is near criminal (very careful not to say criminal)...

What exactly is "near criminal" as that's a concept that is new to me. Either they are committing a crime or they aren't. If they aren't don't insinuate there is anything remotely illegal about their behavior.

In this case, YOU the consumer aren't being forced to use their service, no one is mandating that you MUST pay via a credit card. You were given a credit card holder agreement that disclosed their fee structure. If you CHOOSE to engage in a transaction that falls into that category, then can I use your definition and say that "you are a near accessory to a criminal act"?

The credit card issuers can prevent merchants from adding a surcharge in the US because they can. Do you not benefit from that as a consumer? Or is your complaint that you own a business and that you can't tack on that 2% though you'd like to?

Last time I checked, no one was forced to carry a card with a fee. Shop around, find one without it if this is an issue for you. Or use cash/traveler's checks. Banks have a right to a profit. You as a consumer have a right to reject their service if that profit is unaccpetable to you.

BTW, in case you're wondering, I'm a part owner in one of our countries largest financial institutions and credit card issuers. I resent the implication that a crime has been committed, an implication which affects my investment.

I think "near criminal" was just a figure of speech.

I think shopping for a bank and credit card companies is critical. Some of the fees for their services can get out of hand. I certainly don't want to help in this way to contribute to Ryan's early retirement.

I like that bank commercial where the lady says she doesn't think she should have to pay for this & that & this & that, etc, and the rep says "we don't either."

My USAA M/C and VISA debit card (with the visa portion disabled) don't charge anything other than the 1% conversion fee, which I don't think there is anyway around.

I recently received a Citibank AAdvantage Mastercard so I could accummulate reward miles more quickly as well as take advantage of a 12,500 mile bonus after my first purchase with the new card. This card has an annual fee of $50. Their terms and conditions state that a 2% fee will be placed on all foreign transactions over and above the 1% charged by Mastercard so I am aware of this upfront.

I currently have an MBNA Mastercard that charges no annual fee and only 1% for foreign transactions. I have used this card on my previous overseas trips.

This was a case of being informed and choosing a card where I can accummulate miles quicker. I may decide to use the MBNA Mastercard when I travel overseas to minimize costs and use the Citibank AA card domestically to get the miles.

If you don't have the terms and conditions for your card, just phone the number on the back and ask what they charge for foreign transactions. Then you won't be surprised when you get your bill.

Ryan...

Please please just tell us...when the near criminal banks such as Citibank, Chase, First USA, Bank of America (the bad guys in this) add a 2% charge for foreign transactions, just what am I being charged for....the justification for foreign currency surcharges has always been the possibility of fluctuations of the exchange rate and the high cost of transporting different bank notes from place to place. What is the justification for the 2% other than we can do it if we want? To me, that's near criminal. Nobody said they have commited a crime, I didn't call them criminal.

And yes, consumers do have the choice. The problem is the banks make every effort to bury this near criminal surcharge as deep in the samd as possible and just lost a multi million dollar law suit because of it.

And I'm sorry, it is ripping people off and still in my opinion NEAR criminal.

OK, it's near criminal in your view. Then I will reiterate that you are an accessory to near-crime if you aiding and abetting an action that is a "near crime" by willingly participating in said "near crime."

xyz,
To answer the real question - I told earlier what you are being charged for. You are being charged a 2% fee because that 2% allows them to offer you 0% refinancings, 24-hour toll free service, credit if your a sub-prime customer - the biggest credit risk to banks, miles if a Continental card, points on other cards, the cost of those people who don't pay, the salaries of the employees who make using your card possible, and a profit to those risking capital by providing the company with the funds that are used to cover your balance.

If you believe there should be a direct benefit associated with every single cost, then that is, pardon the phrase, a simplistic view of the world. That's the equivalent of saying you should only pay taxes on those items that you can get direct benefit from.

It doesn't work that way.

Are they taking that 2% without providing much service, you bet. Are they providing you with NUMEROUS other services that get paid for by that 2%, you bet.

Thank you Ryan for answering the question...they are charging you 2% for nothing!

The point is they tried in the past to hide the charge by not showing it explicitely on statements and burying it in the fine print of a 5 page credit agreement.

And they lost a multi million dollar suit for their troubles and this is the way they make it up.

Of course, people I hope understand they are being ripped off and that not all banks pull this near criminal garbage on them

And finally, this charge would have been still born several years ago if only people weren't stupid then and paid these fees when they are easy to avoid.

Do remember that once upon a time, cc's tried to charge an annual fee. And when people discovered there were many banks not charging annual fees for credit cards, and they began flocking to AT&T and others, out they went.

Incidentally, other than the airline reward cards, there are still people who pay annual fees for credit cards. They just don't realize that all you have to do is pick up the phone and say to the customer servie rep (hopefully who is not in India), "Mr. or Ms. Customer Service Rep, if you don't remove the annual fee from my account, I'm taking my credit card business elsewhere." And the customer service rep, after a pause, will usually say, "Yes, I will remove the annual fee." Repeat, not for the airline reward cards; at least the ones that pay 1 point per dollar. Some banks are offering free airline reward cards that pay 1 point for $2....

Had people then (or maybe it it not too late) all began telling these banks to take a hike with their near criminal 2% fee, that would be the end of it for everybody.