Using Credit Cards in Britain
 

My brother-in-law is telling me that using credit cards on our vacation is not wise due to extra percentage rates they charge. Is this correct? And yes, dear Fodorites, I have done a search.

It depends on the card rules. Some will charge you an extra fee for foreign currency, some will just charge you a premium on the exchange rate, I think there are one or two out there that may be straight exchange rate, but I'm not sure... you might have to give in a call to the card, and make sure to ask exact questions (as in the case of it being added into the exchange rate).

Everyone says their CC's charge a premium - but I have not experienced that at all. Maybe it is because both of my Visa's are issued through credit unions. But even IF yours does charge an exchange premium, it would still be a better rate than travelers checks or other instruments.

Credit and ATM cards give you the best rates.

I agree with Janis. My credit card is issued through a credit union and there is no surcharge. Have you checked directly with the bank that issues your card?

CCs and ATMs are definitely the way to go for convenience and the best rates.

My understanding:

Visa International and Mastercard both add an overseas transaction fee to all transactions, but some credit card issuers (banks, primarily) add foreign transaction fees on top of the Visa or Mastercard corporate fees.

It is the second type of fee that you can avoid by using a card from a credit union or another card-issuer that does not add these fees. (For example, some British Airways Visa cards do not have this fee for transactions in the UK).

Visa and MC add a 1% charge. Individual issuers can add additional percentage if they choose to. This ranges from zero to about 3%.

The 1% fee isn't a big deal for the convenience of using a credit card, but another 3% certainly would be. Check with your issuer to see if they add anything on top of the standard 1%.

We have one card that does, and one that doesn't--so we use the second card when we go overseas. By the way, many banks are now also adding fees to their debit cards and ATM cards, just as many credit cards do--so check with your bank.

I believe my Bank of America Visa adds a percentage on- maybe 3%, but I need to call. Besides obtaining a card through BA or a credit union, where did you apply for a CC with no international fees? I'm wondering if I should apply directly on VISAs website. Also, does anyone know if Discover is accepted overseas?

Youo don't have a visa card...you have a Citibank Visa card. The policies are set by the bank.

As far as not paying the additional percentage, simply apply to a bank that doesn't pull this crap.

Of the big credit card banks, MBNA and Capital One still as of this writing do not impose additional fees for cc transactions in foreign currencies.

Erin,

I really don't think they have ever heard of the Discovery Card in Europe.

Banks that DO NOT charge any "extra" fees for conversion include MBNA and Capitol One. Apply to them.

Curious

Even with the cards that add the additional fee, you are probably beating what it would cost to get local currency from an exchange, don't know about traveler's checks. Also, the cc fees are calculated on the interbank exchange rate and this is just not available to us.

Curious- thank you for the information. I work for a bank, and the credit cards we issue (through Chase) have fees, which is unfortunate.

Coco- Interbank exchange rates are available online. Its tough to know exactly what rate you are going to get, as the date a transaction posts to your account isn't necessarily the day you made your purchase. You are definitely right about using credit cards versus changing money.

Great about the Capital One. I have one and might just use it. However, I am more of a pay what you can with cash type of girl. So, maybe I will use the ATM and get what I might need out and use the good ol' Capital One for overages. Thanks everyone!!

Update to my post on this question:

British Airways VISA, issued by FirstUSA Bank (aka BankOne) now adds 2% fee for all overseas transactions, including those in the UK. That means you will pay a total of 3% add-on for the privilege of using your British Airways VISA in Britain!

Find another card for overseas transactions!

For those based in UK, Nationwide is one of the few financial institutions not to add any fee or conversion cost when using their ATM/debit (Flex Card) or credit card (Visa) abroad. Another is Frizzell, available from affiliated bodies like trade unions.

What has been said above is true. But let's put things in perspective. Suppose you charged a whopping $2000 worth on your credit card in Britain. If you have one of the "worst" credit cards, it's going to cost you a total of $60 for the convenience of using it. Meanwhile I know of no way to get the $2000 changed to British pounds without some sort of fee or conversion rate, so using that card isn't really costing you a full $60. If it is convenient to switch your credit card to get one that only does the initial 1% and it will then save you about $40 on the trip (based on that $2000 charges), then do it. But if your current credit card is otherwise a good deal, gives you other benefits such as frequent flyer miles, then you decide if it is worth it to save a few dollars.

Don't ever remember being charged 1% for using credit card in Europe and I have a Capitol one Visa that gives me ff miles.
However after reading the above post I called and golly gee whiz they are charging 1%. They were quick to point out that the charge was from Visa and NOT capitol one.
In addition there is a 3% charge for cash from a ATM plus 7.9% finance charge.
I have always used cc in Europe but have never used an ATM and I guess I'll continue my pratice of using cc and cash. Usually carry approx. 3to0400 in cash. The rest is all cc.

The American British Airways card is offered by First USA now Bank One. When First USA went into the foreign credit card surcharge business (addng the additional 2% to their cards), the one card they exempted was the British Airways card. I had thought this was because British Airways, a foreign carrier, wanted it that way.

Today I received notice from them that they are instituting this obscene charge onto that card effective 01 November. It will be their loss as I will no longer use that card.

Such is the arrogance of these banks. They lost the suit in court regarding these surcharges and their failure to prominently notify customers as to them; see the earlier posts in this thread of people under the illusion they were not being charged any surcharge...the banks simply did not tell you they were passing along the 1% mc/visa charge.

Now one of the few cards from a major bank is going this route.

It's just a sick world out there.

I have today sent the following e-mail to British Airways:

You, as a foreign airline carrier in the US, co-sponsor a credit card issued by First USA (or Bank One). Several years ago, First USA instituted an obscene additional 2% charge to their credit cards for what they are unable to say. I assumed your card was exempted from this fee because you objected as a foreign carrier.

Today I received a notice from them that they are instituting this fee on you r co-branded credit card effective 01 November 2003. I assume either they cleared it with you or got you to change the terms of your agreement with them or something like that.

My question to you is why are you permitting them to do this (unless they have agreed to give you a piece of the action). I am quite sure your agreement with them gives you some sort of ability to veto this so please don't give me an answer that this is a decision made by First USA alone. Also please do not give me the answer that this is normal practice in the credit card business.

I will assume you have now decided that the good will of your customers is no longer important to you and unless you do something to stop this, you can rest assured I will take my business to Virgin Atlantic.

Very Most Untrly Yours,

xyz123

I urge all other British Airways visa cardholders to do likewise. Perhaps if we all threaten to take our business elsewhere, this outrage will be stopped.

The following is a copy of an e-mail I have just sent to First USA regarding this issue. Holders of the British Airways card are urged to send a similar message:

Dear First USA:

It isn't bad enough you lost the foeign exchange surcharge suit several months ago. Today I received a notice from you that you are instituting the obscene 2% additional charge for foreign transactions on my British Airways visa account.

What additional services will I be receiving for this 2%. You have nothing to do with the currency exchange; when you receive it the transaction has already been converted to US dollars so there is no foreign exchange fluctuatins you are protecting against. I don't want to hear the bs that foreign transactions lead to more disputes; the reality is airline charges lead to more disputes yet you do not surcharge them.

Did British Airways give you permission to do this under their co-brand agreement? Are you sharing the illicit profits from this totally unjustified charge with British Airways to get them to drop their objections?

Please have a knowledgeable person contact me so we can discuss this is a professional manner. Do not give me such answers as it is standard practice in the credit card business (MBNA and Capital One do not rip off their customers this way)...or it is necessary to standardize charges among all your cards.

It is merely another example of greed of trying to rip off customers who have been loyal supporters for years.

As for me, I will no longer use this card for foreign transactions so on the whole it will be your loss to have insulted my inteligence this way.

Please have somebody in authority contact me so we can discuss this on a professional level and none of your pre-canned answers.

This is an outrage and another example of how you just don't give a damn about the loyalty of your customers.

Most Untrly Yours,

xyz123

John,

Folks are recomending you use the ATMs with your debt card, not your _credit_ card.

Keith