MBNA foreign fee confusion
 

I have read here and other places (USAtoday) that MBNA is planning to add 3% to all foreign conversions beginning May 25th. I have also read here that several MBNA-sponsored cards will not be adding on extra fees, at least for now.

I have a MBNA Worldpoints card and have gone through the literature sent with the bills carefully and seen no new fee disclosures. Does this mean that Worldpoints is exempt from the increase? Anyone heard otherwise?

I just called MBNA, and the representative claimed that it was Visa and MasterCard that were adding the 3%. I told him that I doubted it, and that if I found out otherwise, they would be losing my business while I was traveling abroad.

I have the Motley Fool Visa, issued by MBNA. A couple days ago I received a notice of changes to the agreement, one of which was the 3% fee being added to foreign transactions. It's clearly being added by MBNA, not Visa. I'm not sure if the MF card will be exempt from this new fee, but because I received the notice I'm assuming it won't be. Needless to say, I'll be looking for a new card to use overseas, and maybe domestically as well - any recommendations?

After all the talk on here about this problem, I decided to discontinue using my Citibank AAdvantage card overseas (they are definitely raising the fee!).
I called AAA and they assured me that they do not and are not planning to add anything to the 1% Visa already charges - so I applied for and got that card (it's issued by MBNA). We'll see, and I'm leaving next week for France.
Actually, I'm not really sure HOW to tell when the statement comes. I guess you would have to know the exact exchange rate on the date you made the purchase. Can anyone clue me in how to tell what their percentage conversion really was - on the statement?

However, with the recent class action suits for non-disclosure, I think these credit card companies will disclose this before actually changing their policy and fees. Citibank certainly did.
This confusion mostly seems to be with MBNA, with different policies for different cards.

Sue4, if your statement doesn't list the exchange rate, the only way I know of to tell what exchange rate was used is to keep track of the cost in Euros so you can compare it to the cost in dollars, and then divide one by the other. You can then compare that rate to the historical interbank exchange rate for that date using the currency converter at www.oanda.com.

Luckily, the card I've been using recently does display the exact exchange rate used, to several decimal places. (This is President's Choice MasterCard - for Canadians.)

Does anyone have any idea if this is true with American Express?

We are leaving in three weeks and I am SO confused! Our current plan is to take some cash, use a debit card to get more cash, and Am Ex for purchases (dinners, tours, souveniers).

Amex has a 2% charge, so it is lower than most VISA/MC, since all VISA/MC have a 1% fee from VISA/MC, and most issuers add an additional 2%. MBNA (which I have) and Capital One don't (or at least, didn't in the past!). I'll be checking with MBNA and cancelling my card if they are starting to add this bogus fee as well.

Anne

Our credit card company confirmed that the conversion fee is 3%. It was recommended to us by a European relative to take US dollar travelers' checks. (the exchange rate for euro travelers checks by our US bank was far worse than the current exchange rate in most European banks, so we'll do our exchanging there)

Historically, Amex has charged 2% conversion rate for purchases made in foreign currency. All Visa and Mastercards had a 1% currency conversion fee, with some card issuers adding 1-2% additional. Up until early April, most people here found that cards from MBNA, Capital One, and USAA did not add fees over and above the Visa/MC International 1%. That is apparently changing with some cards, and it will be very important to read every disclosure that comes with your card statements.

I think it is confusing because of all the different things you read in various media. I have an MBNA AAA Visa and they are not adding the extra fee to that card. It still has the one pct from Visa it always did, of course. Because they are not adding it (for now, knock on wood) to some of their cards, I suspect it must be from MBNA, not from Visa. I didn't think it was adding on 3 pct, either, but adding on 2 pct as 1 pct was always on there from Visa or MC. If it were Visa, everyone with a Visa card regardless of issuer would have the fee, and I think we've read on here from other companies (mainly credit unions, I guess), who don't have it.

The only way to tell about your card is to call up MBNA and ask them about your specific card. It sounds like you have an MBNA card sponsored by MBNA (I don't know what worldpoints means), so I suspect it would have the extra fee since MBNA is the one who decided to add the charge. But, I do think you would have to be notified, maybe you just haven't gotten it yet -- or maybe you won't. I'd call if I were you.

Although you never can tell what people will tell you on the phone. I have spoken to a couple customer service reps at MBNA and gotten two different stories, and one said how they all were so confused there at MBNA. However, they certainly admitted to me it was MBNA adding the fee, they never claimed otherwise. They specifically gave me some story about how they were doing it to be the same as other cards, to justify it.

The first guy at MBNA I spoke to had some story about how it was changing to coming from MBNA and nothing was coming from Visa anymore, but the end result was the same. I think this is something they can't explain very well and don't understand themselves, but I suspect (not sure), all they mean by that is you didn't used to see it on the bill when it was the one pct Visa fee but since it is their added fee, they are going to itemize it on the bill.

Sandy, I'm really confused. Are you saying that you will take US $ traveler's checks to use, cash, or spend in Europe? If so, do you really think that won't cost you a whole lot more than the 3% from a credit card? While some European banks may have a decent exchange rate, won't they mainly charge you a fee in that case for cashing TC's?

I think the confusion about 2-3% is that Visa/MC are now passing the fee on to the issuer, whose responsibility it is to report it. (passing the buck so to speak) So that Citibank is not raising their fee, but simply telling you about it again since now they have to put it on the statement. They are still charging you 2% over and above the Visa/MC 1%.

It seems indeed that there are some MBNA sponsored cards that are exempt from their new 2% fee, which won't start till May. My NEA and Christina's AAA cards are two of them. I charged a couple of things in April and got a good rate on them according to Oanda. (Visa held on to them for two days and the rate went down instead of up!) We'll see what happens in May.

Well, PATRICK, back when those pesky "currency conversion fees" were first introduced, I discovered that when going to Paris, for example, I could acquire AAA AmExp traveler's checks in the foreign demonination (for 99% of the interbank rate) and cash them at the AmExp office, or any post office, with no charges/fees, for cash. On one visit, we were even able to cash them at the front desk of our hotel (for the face value, with no fees/charges).

Since I've just received a "notice" from MBNA, I will check with AAA forthwith regarding the exchange rate for travelers checks. Then, I will check with recent visitors to Paris with regard to cashing them once there.

I, for one, plan to diligently check out the most economical options, before determining that the extra 3% is something I will have to endure.

There is no question but that MC/Visa, your provider have figured out a way to grab megabucks from you for absolutely nothing.

To my knowledge, and I have sure have not received any notice to indicate anything to contrary, USAA Visa and USAA MasterCard is not charging these extra fees. And you do not have to be a member of USAA Insurance to acquire their credit cards. Good credit of course is a must.

I've read that MBNA is the largest issuer of credit cards, in large part because they offer affiliation cards: i.e., if you get a NASCAR card, or an OSU alumnicard, your card is coming from MBNA, and they will handle the processing. Each affiliated group has a contract, and one cannot abrogate a contract mid-term.

So I think MBNA has made a decision to increase their fees (and I think the increase may be 2%; the mastercard/visa cartel has decided to rename their conversion fee a finance charge and apply it to purchases made in Euro, or made overseas in dollars and impose it on the card issuer, rather than the consumer, so I think the 3% fee is a combination of the old 1% visa fee and an extra charge imposed by MBNA).

In any event, unless competitive pressures (such as all of us cancelling any MBNA card) force a change in this decision, I would anticipate that the higher fees will be imposed on the various affiliation group members when that group's contract is up for renewal.

I don't mind paying for services, and I know that there are huge expenses involved in building and maintaining a world-wide currency delivery service, not to mention maintaining the phone banks we are all calling about this, but I think they have gone too far now. The merchant pays a healthy commission to visa/mastercard/whoever for the privilege of selling us something, and of course that cost is included in what we pay. The banks make unbelievable amounts from those of us who do not pay off our cards completely every month (and the number of people in that category is huge), and now they want to add an additional fee onto our end of the transaction.

My father had heart disease and needed a transplant. His doctor told him he was lucky, they had two donor hearts available that matched him, one from a high school athlete who had been killed in a car accident, the other from a retired banker. My father chose the one from the banker, because he wanted one that had never been used.

TCs are hardly an alternative to a credit card since most stores and restaurants in Europe will not accept them. Moreover, American Express offices are not found in every town. The alternative is to use cash withdrawn from an ATM.

I just received notice that my British Airways Visa (Chase) will be charging the 3% for foriegn transactions. I will be using my new Visa from a local credit union on foriegn transactions from now on.

well, coincidentally, I just received in the mail yesterday a notice about changes in terms for my MBNA AAA Visa card. I read the section on foreign transactions, afraid they had misled me about my card not being raised -- and, luckily, the percentage was listed as only one percent total for my card (on top of that VISA exchange rate thing being either a whole rate or some govt-mandated rate). The change to the terms on my card is that this one pct will be itemized as a foreign transaction fee whereas it used to not be visible.

There were several other changes in APRs and due dates, none of which affect me as I don't carry balances -- however, I can say that if you get this notice you will surely be aware of it, as I didn't know how obvious it was. It's a separate mailing in its own envelope labeled something about changes in terms, it's not just a slip in with your regular bill. So, you can't miss it. I just got mine and it did refer to the 5/25/05 date for the changes, so I imagine some people haven't received it yet.

I agree with you, Clevelandbrown, that this may be a mid-contract term issue and things could change in the future, so I'll keep an eye out (BTW I am an OSU alumna, also).

MBNA needs to educate its customer service reps about this issue. I called several weeks ago and was told that my Texas A&M MBNA master card would be subject to the 3% of fees in April...

Then I called back last week (never received the notice about being subject to the fees), and was told that they are doing it in "waves". My card was not marked for the April, May, or June "wave" of becoming subject to the fees...

?????

I requested a cardholder agreement be sent to me immediately so we will see.

I just got my notice from MBNA and will shred my card before leaving on my trip. I have replaced it with a credit union card.