Credit Card Use in Europe
 

Does anyone know which credit card you can use out of the country (Europe) that will not charge a 3% conversion fee? I just charged a deposit (Fanatsy Travel) on a trip to Greece and Chase Visa charged $247.00 conversion fee. I called and they said everytime it is used out of the Country a conversion fee will be charged. And that most people do not realize the charge on their card because it’s not listed as a separate fee.

That was your conversion fee? yikes, that would be a charge of over $8K. Too bad you didn't know that ahead of time.

If you need a US card, Capitol One cards do not charge a conversion fee.

While many cards are raising fees (like my MBNA from 1% to 3%), my AE cards have dropped from 2% to 1%.

As far as I know right now, Capital One does tack on the extra fee. Visa, as a general rule, always adds 1%. The 3% is a combination of Visa's 1% and 2% from the bank.

To me the charge is pure greed because the bank does nothing to add value to the transaction.

I never use my Bank of America card while I outside of the US.

Ok guys, I just called Capital One, they said, they DO NOT charge a conversion fee or "foriegn exchange fee"

Yes Capital One says that clearly in their ads.

Keith

My MBNA card does not charge the fee but several other MBNA cards do, it depends on the card and I've been told that all MBNA cards eventually will start charging it.

From my recent experiences (last 2 weeks)...

1. Capital One does not charge a fee; it does not even pass along the 1% visa fee.

2. Many MBNA cards charge a 1% fee, some charge the 3%. As MBNA has sold its credit card operations to Bank of America, one of the greediest banks there is, one would suspect all MBNA cards will be charging 3% in the future.

3. USAA passes along the 1% visa fee.

4. Amex charges 2%...I don't see any indication they have cut the fee to 1%.

All this info is based on charges I made during the first 2 weeks of January in various European currencies.

What the card does is change one currency to another. If you had to dothat with cash or trav checks it would cost you a lot more than 3% - closer to 8/9% and sometimes more.

They are allowing you to use their interbank rate of exchange and charging you a small % as a service fee to do the computer "paperwork" for your transactions. (Do you expect them too dothis for you for free? Since when are banks a charity?)

Your other choice is to try to travel the world using only dollars.

I just talked with Capital One and yes, they do say that they don't charge a conversion fee. This is because MC and Visa have already included the fee once it's posted with Capital One. The lady said that since MC and Visa are the global companies, it doens't matter which bank you hold your card through, the fee will be included. So it's very convenient for Capital One to say "they don't charge a fee". They don't charge it but MC and Visa does so it's included but you just can't see it listed separately. Very misleading!

Let's not confuse the issue.

Visa and MC charge their own 1% fee. The card-issuing bank has no control over Visa's and MC's 1% fee.

The card-issuing bank does, however, control whether the bank charges any additional fee for currency-conversion. Many banks such as MBNA charge 2% on top of Visa's and MC's 1%. Capital One currently does not charge any fee on top of Visa'a and MC's 1%.

I'm using my Capital One card abroad.

Keep in mind that if you use your CC for ATM cash withdrawls you might be charged a fee from the servicing bank if they don't have any agreements with your issuing bank.

nytraqveler...

I have no problem with the bank or better yet the organization doing the currency conversion addng on 1% for doing the conversion and taking the small risk inherent in currency transactions. The 1% charge from visa is therefore justified and when a bank passes that along, that's fine.

However, and it's a big however, the additional 2% is almost criminal....they perform no service for that....when the charge reaches their computer it has already been converted...it doesn't matter if the charge was incurred in New York, London or Timbuctoo for that matter. When they charge an additional 2% they are performing no service for you.

My Capital One charges do seem to come through at the interbank rate without the additional 1% charged by visa. The exchange rate I got on Capital One was the best of all the exchange rates throughout my last trip 2 weeks ago.

Thanks everyone! It appears the best card to use is Capitol One.

Xyz123, the absence of even the 1% (supposedly mandatory according to Visa) fee on your Capital One bill is great to know about -- much thanks for sharing the info. That gives me one more reason to use my Capital One overseas.

That's interesting. The Visa site I read says the ISA is charged to the issuing institutions, and they can either pass it through or not, at their discretion.

http://www.corporate.visa.com/pd/con...x_faq.jsp#faq6

I don;t see how it's possible to know if the 1% is charged or not - since rates change daily and the date your charge comes through is usually not the date you charge it - but some later time - depending on the merchant, the exchanger (Visa or MC or AmEx) and the bank (if one is involved).

As for the bank charging - or not - they're the intermediary between you and Visa - and charge for whatever computer paperwork they do. (One reason I prefer AMEX - only one set of rules - no bank interpretations in the way.) And - asa any middleman they charge a fee. If you can get a bank without it fine - but I don;t think it's criminal to charge for a service.

(To me this is not nearly as bad as banks that charge you to take money out of your own account via ATM card - I would never pay for that.)

I spoke to someone at VISA who told me that the 1% is built into the exchange rate so it's never seen as a surcharge, and they use the Federal Reserve Bank's dollar and euro valuation to determine the exchange rate. Thought I'd pass this on.

It's possible to see whether or not the 1% is charged by referring to xe.com/ccc

My reading of the link I posted above suggests that the 1% ISA is not embedded in the exchange rate.

You can probably talk to five people at Visa or your bank and get eight different answers to most foreign exchange questions. "I don't know" is not typically in the vocabulary of a minor functionary.

I just spoke with MBNA this past week regarding the conversion fee, and the person on the phone told me that soon, I think it was March or April, all the MBNA CC will be charging 3% total. I told her that I guessed it was because of the BOA takeover and she said something like no, it was because they were losing money on the transactions. (Ya right) So I asked her to cancel two of my MBNA cards and said I would only keep the one from L L Bean and use it ONLY for Bean, in order to receive free shipping.
I was also in contact with Capital One and they said they only have the 1% Visa charges and do not add anything extra. I will be getting a Capital One card very soon.
Char

Question, today it is better to use Amex that a MBNA visa ?
Called my MBNA Visa but their answer was kind of confusing....THank you.

In Greece many shops don't even accept AMEX, but if they do they will pass on the 7% service fee to the customer.

people here are saying both that capitol one does and does not pass on the 1% fee from visa. i find it hard to believe they don't. why on earth would they agree to actually losing a full percent on all foreign purchases? of course they pass it on.

Until they actually up the percentage, it will be cheaper to use MBNA at 1% as AMEX charges 2%. It depends on when you are going.
Char

Well draw your own conclusion...

On 17/01/06 using my Capital One visa I charged £19 for a ticket at the Royal National Theatre in London. It was converted by Capital one to US$33.53. My calculator says that the rate therefore was $1.764736842 for £1.

According to Oanda, on 17/01/06, the interbank rate was $1.76990; on 18/01/06, the day it was probably processed the interbank rate was $1.7650 and the next day it was $1.76540...now you do understand, of course, that these are average rates for the day and that minute variations can occur during the day but it sure as hell seems to me that in this case Capital One was indeed using the interbank rate at the instant the charge was converted with no additional 1% which would increase the rate to $1.782384211.

Now as to why Capital One does it, well for the same reason Chase is sponsoring a credit card that gives you a 3% rebate on all gasoline purchases and 1% on others, for the same reason Citibank sponsors a credit card that gives you 5% off all Shell gasoline purchases and 1% elsewhere, to entice you to use the card for other purposes. Capital One has apparently decided by providing a 1% break to its customers on all foreign purchases, that means what you pay using a Capital One credit card is 3% cheaper than if you are stupid enough to use a credit card with the near criminal additional 2% charge as well as those that pass along the 1% visa fee and hopefully people will then be willing to use the credit card for other purposes because after all the issuing bank gets a piece of the action for every charge you make using its credit cards and of course if you're dumb enough not to pay the entire balance each month, then you will pay their inflated interest rates but if you're smart and use a credit card the proper way namely pay your balance in full each month...well you can come out ahead.

According to xe.com/ccc, xyz123 paid $.04 for the transaction. That's what everyone should always pay IMO.

I have to gather that Fantasy Travel is not located in the US. In Greece?

Next time, consider wiring the funds to the in-country outfitter. The bank charge for a Intl Wire should be more than $50, if that. And be sure the funds don't go thru a middle-man bank and are transferred in USD only. If an outfitter is providing prices to you in USD and asks for payment in USD (even with a Credit Card), then there should be no conversion fee.

I do that for all my funds transfers to Africa, and never cost more than the wiring fee. That $247 conversion fee could have paid for a r/t flight to anywhere in the US. The $8,000 cost of the trip in frequent flyer miles, if that's the reason you used the credit card might amount to $150 toward the price of a FF ticket.

Wire the funds and don't forget to take our trip insurance for any prepaid trip in case of cancellation, interruption and lots of other things.

A correction to my earlier post. I mistaken said that I was charged only 1% for my AE card purchases in Europe. After checking the exchange rate records on oanda.com, I found that it's still 2%. Sorry about that.