MasterCard Will Expand Fees on International Transactions
Apr 20th, 2005, 11:17 AM
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MasterCard Will Expand Fees on International Transactions
A repeat of what I posted on another thread.
I don't intend to run thru all the details but this headline is on an article on page D2 of today's WSJ (April 20):
"Mastercard Will Expand Fees On International Transactions"
A couple of points from the article:
1. MC is joining Visa which this month started levying the fee.
2. The new fees will be charged directly to the issuer.
3. Some banks (the issuers) such as JP Morgan Chase are choosing not to pass along the new fee. However, other issuers, including MBNA, HSBC and Capital One Financial will.
4.The new fees apply to users of both MC credit and debit cards, and include ATM withdrawals and debit-card purchases.
All you confused people can start all over again on a new thread.
I don't intend to run thru all the details but this headline is on an article on page D2 of today's WSJ (April 20):
"Mastercard Will Expand Fees On International Transactions"
A couple of points from the article:
1. MC is joining Visa which this month started levying the fee.
2. The new fees will be charged directly to the issuer.
3. Some banks (the issuers) such as JP Morgan Chase are choosing not to pass along the new fee. However, other issuers, including MBNA, HSBC and Capital One Financial will.
4.The new fees apply to users of both MC credit and debit cards, and include ATM withdrawals and debit-card purchases.
All you confused people can start all over again on a new thread.
Apr 20th, 2005, 01:24 PM
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Previously (I last used my ATM in Germany in mid-February), I was given the bank rate when I used my ATM for withdrawals from my checking account. My rate always compared with the one posted on www.oanda.com.
I was just curious about future ATM withdrawals from my checking account, as my ATM card does have a Visa logo on it...
We will be in Italy May 13-25
I was just curious about future ATM withdrawals from my checking account, as my ATM card does have a Visa logo on it...
We will be in Italy May 13-25
Apr 20th, 2005, 01:59 PM
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I received disclosures in the mail on two Visa debit cards - both will only pass on the 1% fee.
My MBNA MasterCard will begin assessing the 3% fee. Compass Bank (a regional bank) will assess 3% on their Visa, but that was in the disclosure prior to this new law.
Husband's credit union Visa will only pass on the 1%.
I called another credit union and they will only pass 1%. Based on this 'empirical' evidence, sounds like credit unions are the place to go.
My MBNA MasterCard will begin assessing the 3% fee. Compass Bank (a regional bank) will assess 3% on their Visa, but that was in the disclosure prior to this new law.
Husband's credit union Visa will only pass on the 1%.
I called another credit union and they will only pass 1%. Based on this 'empirical' evidence, sounds like credit unions are the place to go.
Apr 20th, 2005, 02:11 PM
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well, I guess I'm in that confused crowd. Since the WSJ doesn't allow anyone to read it online, I don't know what the article is claiming, but from all of the above, there is nothing about this that sounds new to me or an "expansion" of fees, nor the claim that they are "joining Visa" which started levying "the fee" this month.
All of the comments above are referring to the same fee they always had (that one pct), so why is that an expansion?
I don't have any debit card, but do have both a Visa and MC, and from two of the banks cited above that claim they are going to pass on charges. I have gotten no notice from them on that point. I've talked to both of them recently, and they both said there was no change in fees and nothing over the one pct Visa/MC charge that there had always been (I have a AAA MBNA Visa and Capital One MC).
I have a VISA card and have received absolutely no notice of change in terms, and I know I didn't accidentally overlook it.
All of the comments above are referring to the same fee they always had (that one pct), so why is that an expansion?
I don't have any debit card, but do have both a Visa and MC, and from two of the banks cited above that claim they are going to pass on charges. I have gotten no notice from them on that point. I've talked to both of them recently, and they both said there was no change in fees and nothing over the one pct Visa/MC charge that there had always been (I have a AAA MBNA Visa and Capital One MC).
I have a VISA card and have received absolutely no notice of change in terms, and I know I didn't accidentally overlook it.
Apr 20th, 2005, 04:04 PM
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Sorry, Christina, this is a NEW fee to be charged to the "issuer". A smaller article appeared in the NYT on April 10:
http://travel2.nytimes.com/mem/trave...57C0A9639C8B63
Banks, the issuers, have contracts with MC and Visa. These contracts probably have different expiration dates and so the implementation of the new fees may vary. In addition, different affiliated groups: AAA, American Airlines, Brown University, etc. will have contacts that expire at different times so the implementation even within the same bank may vary.
http://travel2.nytimes.com/mem/trave...57C0A9639C8B63
Banks, the issuers, have contracts with MC and Visa. These contracts probably have different expiration dates and so the implementation of the new fees may vary. In addition, different affiliated groups: AAA, American Airlines, Brown University, etc. will have contacts that expire at different times so the implementation even within the same bank may vary.
Apr 20th, 2005, 04:14 PM
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News Flash:
Credit Card Companies Raise Fees!
Banks Charge More For Customers to Withdraw Own Money!
Regulatory Agencies OK Fee Increases, Fear Banks Not Making Enough Money!
I once heard a drunk banker describe his profession, and it sounded very, shall we say, old? In vino, veritas. . .
Credit Card Companies Raise Fees!
Banks Charge More For Customers to Withdraw Own Money!
Regulatory Agencies OK Fee Increases, Fear Banks Not Making Enough Money!
I once heard a drunk banker describe his profession, and it sounded very, shall we say, old? In vino, veritas. . .
Apr 20th, 2005, 04:33 PM
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This is exactly the same thing we went through on another thread with Visa a while ago. My reading of this article (which admittedly is not 100% clear) is that most people charging purchases abroad will see NO increase. MC (as well as Visa) always added a 1% currency conversion fee, and this does not appear to be changing.
The only thing that is different now is that they will charge you a transaction fee if the merchant outside the US does the conversion and puts the initial charge on your bill in dollars. An earlier article in the WSJ pointed out that this is generally not a good idea anyway, since the merchant will often add their own conversion fee when making the currency change, and often won't give you as good a rate as the credit card company does.
If the merchant does the conversion, the MC fee will be .8%. If MC does the conversion, the fee will be the same 1% as it always was.
It does sound as if AmEx won't charge the fee for a dollar transaction, but they hit you up for 2% if they do the conversion.
But how many people ever buy something in another country and have the initial charge in dollars? I have never been anyplace where I even saw that as an option. I've always gotten a receipt in euro or whatever, and then have the charge appear on my bill in dollars after Visa converts it.
Here is an exact quote from the first two paragraphs of the WSJ article:
<i>MasterCard International Inc. says it plans to charge fees for all card transactions abroad, not just those where it converts to dollars purchases made in a foreign currency. Earlier this month, Visa USA Inc. started levying a 1% fee on every charge made outside a cardholder's country. American Express Co., meanwhile, charges a 2% fee for transactions abroad where currency conversion occurs.
MasterCard says that starting Oct. 1, it will charge issuers a fee of 0.8% on all transactions when the card holder and merchant are from different countries. The company also plans to levy an additional 0.2% whenever a merchant's foreign currency needs to be converted. The new fees apply to users of both MasterCard credit and debit cards, and include ATM withdrawals and debit-card purchases. </i>
The only thing that is different now is that they will charge you a transaction fee if the merchant outside the US does the conversion and puts the initial charge on your bill in dollars. An earlier article in the WSJ pointed out that this is generally not a good idea anyway, since the merchant will often add their own conversion fee when making the currency change, and often won't give you as good a rate as the credit card company does.
If the merchant does the conversion, the MC fee will be .8%. If MC does the conversion, the fee will be the same 1% as it always was.
It does sound as if AmEx won't charge the fee for a dollar transaction, but they hit you up for 2% if they do the conversion.
But how many people ever buy something in another country and have the initial charge in dollars? I have never been anyplace where I even saw that as an option. I've always gotten a receipt in euro or whatever, and then have the charge appear on my bill in dollars after Visa converts it.
Here is an exact quote from the first two paragraphs of the WSJ article:
<i>MasterCard International Inc. says it plans to charge fees for all card transactions abroad, not just those where it converts to dollars purchases made in a foreign currency. Earlier this month, Visa USA Inc. started levying a 1% fee on every charge made outside a cardholder's country. American Express Co., meanwhile, charges a 2% fee for transactions abroad where currency conversion occurs.
MasterCard says that starting Oct. 1, it will charge issuers a fee of 0.8% on all transactions when the card holder and merchant are from different countries. The company also plans to levy an additional 0.2% whenever a merchant's foreign currency needs to be converted. The new fees apply to users of both MasterCard credit and debit cards, and include ATM withdrawals and debit-card purchases. </i>
Apr 20th, 2005, 05:21 PM
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nonnafelice is right, I just read the article too. The part that I can't relate to is the statement in the article about "a growing number of foreign merchants that allowed travelers to use their cards to pay in dollars."
Perhaps that is true, but I haven't experienced it in my travels in Europe. As someone pointed out above, any merchant who provides that service charges a fee for converting currency, so I am not sure that it was ever a good idea. Now it's a less good idea. But otherwise, it does not appear to me that this "new fee" is going to affect me.
If I am wrong, please correct me.
Perhaps that is true, but I haven't experienced it in my travels in Europe. As someone pointed out above, any merchant who provides that service charges a fee for converting currency, so I am not sure that it was ever a good idea. Now it's a less good idea. But otherwise, it does not appear to me that this "new fee" is going to affect me.
If I am wrong, please correct me.
Apr 20th, 2005, 06:38 PM
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There has been some discussion of merchants offering to charge in dollars. In some cases, it was a scam because the exchange rate was poor. In other cases, it wasn't such a bad deal, but more a matter of the merchant trying to capture what the card companies were skimming for the "service" of converting currency. The new policy appears to be nothing more than an attempt to close the loophole (in other words: to charge people no matter what.)
Apr 20th, 2005, 08:31 PM
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Do a search above on topic dynamic currency conversion...
It is a scam that started out in Ireland a few years ago and depends on the stupidity of people who don't understand that exchanging actual cash and bank notes is much more expensive than the exchange done by cc companies.
Say the rate is about US$1.30 = €1...with a credit card you will probably pay anything from $1.313 to axs much as $1.339 for €1 depending on how much your bank wants to rip you off for on the exchange (the lower figure being a mark up of 1% that visa/mc up till now added to exchange rates the higher figure being 3% above interbank rate as many near criminal banks add 2% to the exchange even though they had nothing to do with the conversion) so people knew in their minds that cc companies were charging them 1 to 3% above the official rate. But...
If you go to a currencyh exchange place with actual US greenbacks, after fees etc. you would probably pay close to $1.40 for €1 and that would be the rate you would see posted.
So in you go to a touristy type place and you buy something. The merchant might say to you, look the exchange rate is $1.40 so I'll tell you what, your bank will charge you 1 to 3% for a cc fee so I'll convert it for you at the rate of $1.40 (or sometimes a tad lower) saving you the exchange fee...and of course you would think you are getting a bargain!
Some smarter consumers might tell the clerk they want to be billed in local currency and after telling you that would be costing you money they lie and say the cc company says you have to be billed in your currency (US dollars in this case). A bloody lie...credit card rules say you are supposed to be billed in local currency and before completing the transaction the merchant must enter into the terminal that you agree to it...
Well the banks were losing the fees they used to rake in on currency exchange, the merchant splits the fee with the cc processor and everybody wins except the consumer who doesn't realize he or she has just been ripped off.
So the credit card companies are trying to regain their lost income by charging you 1% on all foreign transactions despite the fact that if you fall for this scam, you are not exchanging currency at all.
Watch for it on tourist type places in Ireland and it is spreading.
It is a scam that started out in Ireland a few years ago and depends on the stupidity of people who don't understand that exchanging actual cash and bank notes is much more expensive than the exchange done by cc companies.
Say the rate is about US$1.30 = €1...with a credit card you will probably pay anything from $1.313 to axs much as $1.339 for €1 depending on how much your bank wants to rip you off for on the exchange (the lower figure being a mark up of 1% that visa/mc up till now added to exchange rates the higher figure being 3% above interbank rate as many near criminal banks add 2% to the exchange even though they had nothing to do with the conversion) so people knew in their minds that cc companies were charging them 1 to 3% above the official rate. But...
If you go to a currencyh exchange place with actual US greenbacks, after fees etc. you would probably pay close to $1.40 for €1 and that would be the rate you would see posted.
So in you go to a touristy type place and you buy something. The merchant might say to you, look the exchange rate is $1.40 so I'll tell you what, your bank will charge you 1 to 3% for a cc fee so I'll convert it for you at the rate of $1.40 (or sometimes a tad lower) saving you the exchange fee...and of course you would think you are getting a bargain!
Some smarter consumers might tell the clerk they want to be billed in local currency and after telling you that would be costing you money they lie and say the cc company says you have to be billed in your currency (US dollars in this case). A bloody lie...credit card rules say you are supposed to be billed in local currency and before completing the transaction the merchant must enter into the terminal that you agree to it...
Well the banks were losing the fees they used to rake in on currency exchange, the merchant splits the fee with the cc processor and everybody wins except the consumer who doesn't realize he or she has just been ripped off.
So the credit card companies are trying to regain their lost income by charging you 1% on all foreign transactions despite the fact that if you fall for this scam, you are not exchanging currency at all.
Watch for it on tourist type places in Ireland and it is spreading.
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