Motorino

Here's an exact copy from my chase statement from the other day here in Buenos Aires at a Galicia Bank, which is part of Banelco network, which is the only network down here that i know of that will work with plus network:


05/31/2011 Misc. Debit NON-CHASE ATM FEE-WITH $5.00
05/31/2011 ATM Transaction NON-CHASE ATM WITHDRAW AR Peso 1000.00 X 0.2448841 (EXCHG RTE) + 7.47 (EXCHG RTE ADJ) $256.38



I copied the two lines above directly from my online bank register. It is no different when I am in Brazil, London, Italy, Spain or anywhere else - ATM withdrawals appear on 2 lines.

The first line is fee charged by US bank, in this instance Chase = $5.

The second line is a 1000 peso withdrawal.

The bank takes 1000 peso x .2448841 exchange rate = $244 USD.

Seems straight forward and no foreign ATM bank fee, right?

What is "hidden" in that conversion exchange rate is Galicia bank charged 16 pesos for the withdrawal. The 16 pesos is embedded in the exchange rate of .2448841. The actual exchange rate on that day is 1.5% different.

I will repeat, the 16 peso fee charged by Galicia on 1000 pesos (about 1.5%) is totally hidden in the .2448841 exchange rate.

Then US bank takes the $244, which is the converted 1000 pesos plus the Galicia fee of 16 pesos, adds its $5 fee to bring total withdrawal to $249. Then it multiplies this by 3% "exchange rate adjustment", which = $7.47 USD, which totals $256.

Another observation is the way 2nd line is written. One would think $7.47 comes directly from multiplying 1000 by .2448841 x .03 but it does not. 3% of 244 = $7.36.

You must first add $5 chase fee to the $244 to get $249 then multiple by 3% to get $7.47 - a second example of a hidden lumping that is confusing as well.

The result of this is what was a $241 withdrawal for cash to me is actually a $256 withdrawal, $15 lost to bank fees = about 6%.

I do understand how many might believe a foreign bank does not charge a fee because it is not right there out in the open to see, but it is there in that exchange rate for all to see or not to see.

If this register reporting does indeed violate banking laws as you understand them, then feel free to report this to the Banking authorities. Let me know how it goes.

Christina

I don't have any bank statement like yours with an adjustment on it, but I do routinely compare the exchange rate to the actual interbank rate on that day so I know they are fairly close, always within 1 pct, actually. And they can always vary that much within a day.

I might be wrong, but I really do not think it is the foreign bank charging the exchange rate or getting a fee, and I don't know why you are assuming that just because of your statement. If anything, I would think the exchange rate (base, not with any add-ons by your bank) would be determined by the network that does the transaction, such as PLUS, CIrrus, etc. Becuase I just find it really hard to believe every bank in the world has their own exchange rate set by those international networks.

IN any case, the point is that the bank you have, Chase (and B of A) are probably the highest in the US in terms of their flat ATM fee, so congratulations on that ($5). Sure, some other banks have them, but I think they are usually more like $2-3. And there are banks (like Cap One) who do not add anything onto the exchange rate that the transaction comes through as.

What is your evidence that it is the specific foreign bank setting that exchange rate on your statement, rather than your bank or the international network that your card uses (eg, PLUS or Cirrus)? Also, you cannot ever try to figure out exchange rates within one percent in my experience to prove anything, they vary too much within a day. I just am not clear on how you know it is Gallicia doing this. In any case, it isn't common from my statements I've examined in European banks, as I do compare the exchange rate on my statements.

kybourbon

Charges in Buenos Aires have nothing to do with Italy/Europe, but I don't see why you are assuming the Galcia bank tweaked the rate either and not your bank. Your bank is setting/charging the rate/fees.

I think you are just not understanding the fees by your bank. You are being charged a $5 fee for going out of network by your bank.

Next your exchange rate does not have anything embedded in it. If you look up the exchange rate for that day on one of the sites listed above, you will see the exchange rate that day was 0.2448879003. This fluctuates all day, but that is the average for the day. You would be charged the rate at the time of day you used the ATM. 1000 at that rate = $244.89 which is exactly what your bank gave you (no hidden anything). You then have to add on add on the out of network fee that YOUR BANK charges of $5 and the conversion fee YOUR BANK charges of 3% of $7.47(I would get a new bank). You end up with your total of $256. You have assumed (wrongly) that the foreign bank was charging all these fees. They are not, it's your bank. Your bank is charging the out of network fee and then charging their 3% conversion on both the out of network fee and the amount your are exchanging (more money for your bank). They may pay the foreign bank a few cents for the ATM usage, but not as much as the rate they are charging you.

kybourbon

FYI - I don't use Chase, but you should be able to look on their website and see if they have any in network ATM's in Buenos Aires. If you look at the link I posted on the other exchange fee thread, it should be easy to figure out that the individual US banks are charging the fees, not the foreign bank since all banks on the chart have different fees listed. Note that your bank (Chase) is one of the worst on fees.
http://www.flyerguide.com/wiki/index...reign_Exchange

Motorino

It is a fact in Argentina there is an ATM withdrawal fees. If it is not going to bank then netowrk takes it - either way the fee exists and it is embedded in exchange rate: Here is a link to a board on Trip Advisor discussing the matter:
http://www.tripadvisor.co.uk/ShowTop..._District.html

Also, I know they do because screen tells me the fee exists, and the printed receipt states the fee.

J62

kyb,

I think you're getting caught up in the details.

Here's how I read Motorino's main points from her original post.

- It cost 6% to get cash from an ATM. That is twice the cost of using ATM (card?) for purchases.

- While expensive, the 6% is still less than most other methods.

- The 3% forex fee is FIXED at 3%.

- Some restaurants in Italy charge a fee for using a credit card, up to 20% premium.

The fact that your, mine, and many other travelers experiences are quite different than that really doesn't matter. In her mind these are correct statements and valuable advice.

J62

And all of those points she made apply to Italy, which is what this whole thread is about...

nonohina

Thanks, everyone for the great advice!

Henry

I think Motorino has muddied the waters.
The exchange rate is set by the networks (Visa-Plus, MasterCard-Cirrus)and is good for one day see http://usa.visa.com/personal/using_v...rates_faq.html
This rate is the same for credit cards and debit/ATM cards. Consider that if your number is compromised with a credit card the thieves have access to the banks money, if the number of a debit card is compromised the thieves have access to your money.
There are no embedded fees in the exchange rate thanks to a lawsuit see
http://www.ccfsettlement.com/documen...nt_1384141.pdf page 28 b iii.
Italian bank ATMs do not charge us for using the bancomat, this is because of an EU requirement.

Bottom line: Credit cards and Debit/ATM cards get you the best exchange rate. ALL charges come from your financial institution. This includes the foreign transaction fee from the networks that is charged to your bank. Your bank can increase this charge, pass it along, or eat it.

kybourbon

>>>I think Motorino has muddied the waters.<<<

I agree. Motorino received the exact interbank rate for May 31 if you look it up on any of the currency exchange sites so there is no way any fee is hidden in that part of the transaction. For some reason he thinks there is something hidden in it and thinks he should have 1.5% below the actual interbank rate. I don't know any bank that would do that.

I also don't see any fee charged by his Buenos Aires bank as each fee he listed is from Chase and his figures don't reflect any extra 16 peso charge. It's possible the ATM retained part of his $256 for the 16 peso charge and gave him less than the $256, but we would have to see what's on the actual ATM receipt to determine that.

Motorino

http://kingworldnews.com/kingworldne...arkopolos.html

Interesting interview re: banks and foreign withdrawls. Listen to last part of the interciew, the final question in the final 2 minutes - this guy suggests only Amex, platinum and black, and CapitalOne do not charge the 3$ forex fee...

Christina

I couldn't listen to that interview, but it doesn't matter what that one guy "suggests". Suggesting isn't stating a fact and that is just one person, who may not know everything, why presume he does.

I think you mean 3 pct, not 3$? However, those are the main cards without one, but I think credit unions cards may not have one, either. I don't have one, so am not sure, but I know I've read the terms of some Chase CC for BA miles that does not have a foreign transaction fee, so I know that "suggestion" is not accurate. I wouldn't want that card as it does have an annual fee (around $95) and I don't like BA, anyway. There are other Chase CCs that don't have one, also, as well as some Citibank cards and the Pentagon credit union card (not that this does good to a lot of people, I just know people who work at the Pentagon).

Also, Amex typically charges 2.7 pct, not 3 pct, and I know that for fact as I have one and that is in the terms--the ones that have the fee, even if some Amex's do not have it. So stating that Amex charges 3 pct fee, for cards other than the platinum or black ones, isn't accurate.

But those are for credit cards, not bank acct debit cards (which Amex doesn't have). I suppose if someone was foolish or desperate enough to get cash using a credit card, those exchange rates would apply on those credit cards, but along with very expensive cash withdrawal fees on a credit card.

But none of that has to do with ATM transaction fees, which I thought was your main argument, maybe not. But yes, I agree that the majority of US-issued credit cards do have a foreign transaction fee, but some do not, and more than the ones you name saying that is what the link "suggests".

Here is another one without any foreign transaction fee, an HSBC card for certain clients with a premier acct in their bank, you can read the terms yourself http://www.us.hsbc.com/1/2/3/hsbcpremier/privileges