VISA: 3% surcharge on purchases?
Sep 16th, 2003, 05:40 PM
#1
Original Poster
Join Date: Jan 2003
Posts: 478
Likes: 0
Received 0 Likes
on
0 Posts
VISA: 3% surcharge on purchases?
A friend recently returned from Europe. When she got her VISA bill, she discovered they had added a 3% surcharge on all her purchases? We've charged to our VISA car many times and always thought it offered the best exchange rate without any additional charges. Are all the companies (Mastercard, American Express) doing this now?
Sep 16th, 2003, 05:48 PM
#2
Join Date: Mar 2003
Posts: 735
Likes: 0
Received 0 Likes
on
0 Posts
Some Visa and Mastercards add this charge and some do not. The rule is to find out which ones you have that don't and use those when you travel outside the US. By the way, I got burned by these charges when I bought some Canadian theater tickets. You can bet I did not use that credit card again on my Canadian trip!
Sep 16th, 2003, 05:55 PM
#3
Join Date: Jan 2003
Posts: 8,421
Likes: 0
Received 0 Likes
on
0 Posts
Some Visa/Mastercard providerd ITEMIZE this charge - others do not (it's buried)!
You must check with each of your credit card providers before leaving home (it's best to advise them of your trip dates/destinations anyway, so your account doesn't get "frozen" for "unusual" transactions until they can contact you, which they can't because you're away...).
Neither my Capital One nor MBNA cards assess any "currency conversion fee".
If you don't have a card WITHOUT any "currency conversion fees", get one now. Typically, you can apply online and have one within a week.
You must check with each of your credit card providers before leaving home (it's best to advise them of your trip dates/destinations anyway, so your account doesn't get "frozen" for "unusual" transactions until they can contact you, which they can't because you're away...).
Neither my Capital One nor MBNA cards assess any "currency conversion fee".
If you don't have a card WITHOUT any "currency conversion fees", get one now. Typically, you can apply online and have one within a week.
Sep 16th, 2003, 08:11 PM
#4
Join Date: Jan 2003
Posts: 167
Likes: 0
Received 0 Likes
on
0 Posts
I just called MBNA about surcharges and was told that both Master Card and VISA charge 1% but MBNA itself doesn't add any charges.
Then I called First USA and was told it charges 3% (1% for the VISA or Master Card) & then it adds 2%.
So I'll be using MBNA when I go abroad.
Then I called First USA and was told it charges 3% (1% for the VISA or Master Card) & then it adds 2%.
So I'll be using MBNA when I go abroad.
Sep 16th, 2003, 08:39 PM
#5
Join Date: Jan 2003
Posts: 5,271
Likes: 0
Received 0 Likes
on
0 Posts
In a previous thread, I had pointed out that First USA is extending their surcharge to their final credit card not having this charge, the British Airways visa card. I have received their response which is very interesting for the lies it states:
"We are writing to answer your question
about foreign currency conversion rates on your Visa credit card account.
Please note that we are quoted these exchange rates through Visa International,
who in turn obtains their wholesale market rates from Barkley Bank. Please keep
in mind that these rates may fluctuate up or down on an hourly basis.
First USA and Visa International uses the following procedure to convert charge
amounts from a foreign currency to U.S. dollars:
1. The foreign merchant's
bank must deliver the record of each sale to Visa within 45 days of the sale date.
2. Visa converts the sale amount to U.S. dollars.
To do this, they use either a wholesale market rate or, if applicable, the country's
government mandated rate plus 1%. The rate used is the one from
the day before Visa received
the record of the sale, and not the date the sale was made.
3. First USA then
increases the conversion rate by 2% in order to cover the costs associated with obtaining
the converted totals.
Any conversion rate that a merchant quoted to you at the
time of the sale is only an estimate.
We have contacted other credit card issuers
regarding this matter and have been advised that they too, add such an exchange rate
adjustment when converting foreign transaction amounts to U.S dollars. For example,
Citibank confirms that it adds an additional 2% to the 1% added by Visa, while MBNA
and America Express both add an additional 1%. We have been notified that some of
these companies are adding up to an additional 4%.
When you take U.S. currency
abroad as cash or travelers checks (or you exchange money in the U.S.) and convert
it in the foreign country at a bank or exchange service, you are charged a stated
exchange rate plus a percentage of that rate. Taking U.S. denominated credit lines
abroad is no different. If you compare our foreign exchange adjustment rate with
what you would be charged at either a domestic or foreign bank, you will find that
it's very competitive.
Previously this adjustment was built into the overall
exchange rate in the same way that VISA and MasterCard build their 1% rate into the
exchange rate. Because we have many customers who travel extensively, we wanted to
separate our currency conversion exchange rate adjustment from the actual "Exchange
Rate." This allows you to more clearly see the costs of your foreign charges.
Lastly,
when our partnership with British Airways was formed they agreed with all policies
used concerning our accounts. Therefore, they were aware of and agreed to our foreign
transaction conversion methods. As noted previously, the noted adjustment is applied
towards the costs associated with obtaining the converted rates, therefore, there
are no profits that could be shared with British Airways. However, due to special
circumstances concerning our partnership with British Airways, our British Airways
accounts are not charged the additional foreign exchange rate adjustment. These accounts
are only charged the additional 1% from Visa. It is for this reason that there was
not an additional exchange rate adjustment amount added to your transactions on your
statements.
If further questions should arise regarding the information above, please
call me at the number below. If you have concerns regarding any other issue, please
contact Cardmember Services at 800-436-7939.
Sincerely,"
Note the lies:
1. They have nothing to do with the currency exchange; the amount they receive has already been converted.
2. They try to point out MBNA charges 1% while they charge 2%. Of course MBNA charges 1%, they pass along the 1% visa charge for converting. No other surcharge is applied by MBNA.
3. The stuff about the British Airways card does not answer the question of why they are suddenly charging cardholders of British Airways this charge. Apparently, British Airways had objected as it is a foreign carrier and didn't want its customers subject to these charges. Apparently British Airways is now lifting its objections to this charge.
Finally, they subtly sneaked through a new wrinkle to this game. In the past, banks added a 2% surcharge to the conversion rate on top of visa's 1%. Now they are adding 2% to the already 1% increased conversion rate of visa. In other words, they are compounding the 2%...certainly not a big amount but multiply it by the millions of dollars they are gyping their customers of and you understand why banks are in business to do whatever possible to do in their customers.
As I am kind of dumb, I wish if anybody reading this bag of lies put out by First USA can explain to me what they have to do with the currency conversin process that warrants a 2% surcharge when the currency conversion is carried out by visa. And also the lie of how they are now going to provide the information to their customers when the reason it is being done is because of the lawsuit the big banks lost in California when the court found them guilty of not disclosing these charges to their customers.
I thought everybody would be interested in the lies of the big banks in this matter.
"We are writing to answer your question
about foreign currency conversion rates on your Visa credit card account.
Please note that we are quoted these exchange rates through Visa International,
who in turn obtains their wholesale market rates from Barkley Bank. Please keep
in mind that these rates may fluctuate up or down on an hourly basis.
First USA and Visa International uses the following procedure to convert charge
amounts from a foreign currency to U.S. dollars:
1. The foreign merchant's
bank must deliver the record of each sale to Visa within 45 days of the sale date.
2. Visa converts the sale amount to U.S. dollars.
To do this, they use either a wholesale market rate or, if applicable, the country's
government mandated rate plus 1%. The rate used is the one from
the day before Visa received
the record of the sale, and not the date the sale was made.
3. First USA then
increases the conversion rate by 2% in order to cover the costs associated with obtaining
the converted totals.
Any conversion rate that a merchant quoted to you at the
time of the sale is only an estimate.
We have contacted other credit card issuers
regarding this matter and have been advised that they too, add such an exchange rate
adjustment when converting foreign transaction amounts to U.S dollars. For example,
Citibank confirms that it adds an additional 2% to the 1% added by Visa, while MBNA
and America Express both add an additional 1%. We have been notified that some of
these companies are adding up to an additional 4%.
When you take U.S. currency
abroad as cash or travelers checks (or you exchange money in the U.S.) and convert
it in the foreign country at a bank or exchange service, you are charged a stated
exchange rate plus a percentage of that rate. Taking U.S. denominated credit lines
abroad is no different. If you compare our foreign exchange adjustment rate with
what you would be charged at either a domestic or foreign bank, you will find that
it's very competitive.
Previously this adjustment was built into the overall
exchange rate in the same way that VISA and MasterCard build their 1% rate into the
exchange rate. Because we have many customers who travel extensively, we wanted to
separate our currency conversion exchange rate adjustment from the actual "Exchange
Rate." This allows you to more clearly see the costs of your foreign charges.
Lastly,
when our partnership with British Airways was formed they agreed with all policies
used concerning our accounts. Therefore, they were aware of and agreed to our foreign
transaction conversion methods. As noted previously, the noted adjustment is applied
towards the costs associated with obtaining the converted rates, therefore, there
are no profits that could be shared with British Airways. However, due to special
circumstances concerning our partnership with British Airways, our British Airways
accounts are not charged the additional foreign exchange rate adjustment. These accounts
are only charged the additional 1% from Visa. It is for this reason that there was
not an additional exchange rate adjustment amount added to your transactions on your
statements.
If further questions should arise regarding the information above, please
call me at the number below. If you have concerns regarding any other issue, please
contact Cardmember Services at 800-436-7939.
Sincerely,"
Note the lies:
1. They have nothing to do with the currency exchange; the amount they receive has already been converted.
2. They try to point out MBNA charges 1% while they charge 2%. Of course MBNA charges 1%, they pass along the 1% visa charge for converting. No other surcharge is applied by MBNA.
3. The stuff about the British Airways card does not answer the question of why they are suddenly charging cardholders of British Airways this charge. Apparently, British Airways had objected as it is a foreign carrier and didn't want its customers subject to these charges. Apparently British Airways is now lifting its objections to this charge.
Finally, they subtly sneaked through a new wrinkle to this game. In the past, banks added a 2% surcharge to the conversion rate on top of visa's 1%. Now they are adding 2% to the already 1% increased conversion rate of visa. In other words, they are compounding the 2%...certainly not a big amount but multiply it by the millions of dollars they are gyping their customers of and you understand why banks are in business to do whatever possible to do in their customers.
As I am kind of dumb, I wish if anybody reading this bag of lies put out by First USA can explain to me what they have to do with the currency conversin process that warrants a 2% surcharge when the currency conversion is carried out by visa. And also the lie of how they are now going to provide the information to their customers when the reason it is being done is because of the lawsuit the big banks lost in California when the court found them guilty of not disclosing these charges to their customers.
I thought everybody would be interested in the lies of the big banks in this matter.
Sep 17th, 2003, 05:33 AM
#6
Join Date: Aug 2003
Posts: 2,893
Likes: 0
Received 0 Likes
on
0 Posts
Dear xyz123,
You're hardly "kinda dumb." Now you know why I hate banks.
There's significant press on this subject available on the web. You may want to search The New York Times and the Wall Street Journal archives, as well. The trend is more and more banks are signing on to charge their Visa and MC users with currency conversion charges - all for the purpose of making more money. They are hardly going to come right out and tell you that. Banks are in business to make money and my financial advisor reminded me that many got seriously slammed with the collapse of Enron and MCI. Sure, you can shop around for another bank but the banks predict that most consumers won't change. Statistics show that most Americans care more about convenience than they do about saving a couple of bucks. Most Visa and MC users in America never leave the country.
In order to prevent a breakdown, I justify the 3% by using a Visa and MC that offers FF Miles. This way I figure a free seat in Business Class still comes at a terrific value.
You're hardly "kinda dumb." Now you know why I hate banks.
There's significant press on this subject available on the web. You may want to search The New York Times and the Wall Street Journal archives, as well. The trend is more and more banks are signing on to charge their Visa and MC users with currency conversion charges - all for the purpose of making more money. They are hardly going to come right out and tell you that. Banks are in business to make money and my financial advisor reminded me that many got seriously slammed with the collapse of Enron and MCI. Sure, you can shop around for another bank but the banks predict that most consumers won't change. Statistics show that most Americans care more about convenience than they do about saving a couple of bucks. Most Visa and MC users in America never leave the country.
In order to prevent a breakdown, I justify the 3% by using a Visa and MC that offers FF Miles. This way I figure a free seat in Business Class still comes at a terrific value.
Sep 17th, 2003, 10:15 AM
#8
Join Date: Jan 2003
Posts: 34,878
Likes: 0
Received 0 Likes
on
0 Posts
The fact that First USA lies doesn't surprise me at all. I used to have one of their VISA cards and cancelled it because of the additional percentage conversion rate. That alone might not have done it, but I didn't like them anyway as they have bad customer service, so it was a good opportunity to get rid of them (I switched to a AAA VISA which is MBNA with nothing added to the one percent plus I get 5 pct rebate on gas purchases, good card).
Anyway, when I told them I was cancelling my account and they asked me why since I'd been a customer for quite a few years -- I told them the currency conversion addon and if they wanted to keep me, they'd have to not charge it to me. They even had the audacity to lie to me directly on the phone and claim they all other credit cards charged that, also. They must think you are stupid. So, I told her that wasn't true, I'd just gotten a card that didn't -- and I told her which one. She couldn't think of a comeback to that one.
Actually, I think the customer service people maybe just don't know what they are talking about and have been taught that by FIRST. Why are they comparing themselves to Citibank, anyway, who cares about that one bank in particular, another silly statement by them.
NOne of the cards I have ever had with the 3 pct total charges ever itemized it separately, however.
I don't think there's any point in getting all upset about this, I just don't do business with them, as I have a choice. There will always be some companies worse than others and some who try to pass of lies as reasoning, etc. Consumers have the ultimate weapon of taking their business elsewhere. First is a bad company, anyway, in my experience, for lots of reasons.
Anyway, when I told them I was cancelling my account and they asked me why since I'd been a customer for quite a few years -- I told them the currency conversion addon and if they wanted to keep me, they'd have to not charge it to me. They even had the audacity to lie to me directly on the phone and claim they all other credit cards charged that, also. They must think you are stupid. So, I told her that wasn't true, I'd just gotten a card that didn't -- and I told her which one. She couldn't think of a comeback to that one.
Actually, I think the customer service people maybe just don't know what they are talking about and have been taught that by FIRST. Why are they comparing themselves to Citibank, anyway, who cares about that one bank in particular, another silly statement by them.
NOne of the cards I have ever had with the 3 pct total charges ever itemized it separately, however.
I don't think there's any point in getting all upset about this, I just don't do business with them, as I have a choice. There will always be some companies worse than others and some who try to pass of lies as reasoning, etc. Consumers have the ultimate weapon of taking their business elsewhere. First is a bad company, anyway, in my experience, for lots of reasons.
Sep 17th, 2003, 10:28 AM
#9
Join Date: Feb 2003
Posts: 2,989
Likes: 0
Received 0 Likes
on
0 Posts
Thanks for this post-I just called on both my cards -First USA and Bank One both charge it. My atm/check card doesn't (LaSalle Bank out of Chicago) but I didn't want to have to use it for all purchases. How available is AMEX in Italy?
Sep 17th, 2003, 10:49 AM
#10
Join Date: Feb 2003
Posts: 2,989
Likes: 0
Received 0 Likes
on
0 Posts
P.S. I just applied online for a no conversion fee MBNA card that accrues travel awards. Promised it in 30 days but the operator said that they are processed and should be received within 14 days.
Thread
Original Poster
Forum
Replies
Last Post
samoca
Europe
5
Mar 19th, 2009 04:49 PM
