What's up with this 3% BS!

Mar 31st, 2006, 08:17 AM
  #1  
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What's up with this 3% BS!

Okay, rant for the day. These credit card companies are really starting to get me riled up!

I switched credit cards a few months ago and bam, I get hit with a 3% charge on all foreign transactions on a recent trip. My employer absorbed it, but still, that's a rip off in my book. Motivated me to check all my cards and adjust for future trips.

Thank you - I feel much better now! But we need to plot a revolt!

degas is offline  
Mar 31st, 2006, 08:26 AM
  #2  
 
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A revolt isn't required - all that is needed is the publication of who is charging what and let the invisible hand do its thing.

Schwab Master Card: 0% on credit card transactions, $1 for foreign ATM withdrawals.
Robespierre is offline  
Mar 31st, 2006, 08:30 AM
  #3  
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I'd like to place two large and very visable hands around the skinny neck of the sneaky geek nerd who dreamed up these charges!

Sorry, I get like this at the end of the month when bill review time is upon me.
degas is offline  
Mar 31st, 2006, 08:34 AM
  #4  
wug
 
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I agree, I'm getting that on my bill too. What a rip off. They are already receiving a fee from the foreign companies for accepting their card!

I called about it and they claimed they've "always had this charge but now they are required to separate the 3% charge out and show it as a foreign transaction fee. Before it was added into the charge itself."

Funny, I've always double checked my charges when I've gotten home and I never noticed a 3% increase on all of them before.....

So, Schwab Master Card doesn't charge. I'm going to look into it. Any others anyone knows about??
wug is offline  
Mar 31st, 2006, 08:40 AM
  #5  
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wug, my company (soon to be dropped) didn't even single out the charge. Customer service was curt and acted like I was being "difficult" by even questioning the charge.
degas is offline  
Mar 31st, 2006, 09:01 AM
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I guess I don't understand the rant. If you charge $1,000 you are talking about a $30 total fee. When on a trip I am not going to get upset about an addition $30 cost.
rogerdodger is offline  
Mar 31st, 2006, 09:06 AM
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It's called generating revenue and charging what the "market will bear." I'm sure the bank stockholders are delighted with ghe results.

You should ahve gotten a Capital One card..they don't charge for foreign transactions.
Intrepid1 is offline  
Mar 31st, 2006, 09:06 AM
  #8  
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Yeah, I don't normally sweat the samll stuff. But I'm talking about long trips and $5000 to $6000 charges just for the hotel.
degas is offline  
Mar 31st, 2006, 09:14 AM
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I don't understand why you switched to such a card if you didn't like that. A card has to give you terms of service that you agree to. If you didn't read them -- now whose fault is that.
Christina is offline  
Mar 31st, 2006, 09:21 AM
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I have to agree - the charge IS annoying, but didn't you investigate before you switched? If you had, this wouldn’t have been such a shocker. You can't blame the credit card company because you didn't do your homework.

No revolt, just time for you to make another move! Robespierre offered a good suggestion.
grantop is offline  
Mar 31st, 2006, 09:23 AM
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Someone has to pay the bank or vendor in Europe and collect from your bank over here. That has always been done by "the network", some combination of Visa, MC, Cirrus, Plus, etc. They charge 1% for that service. Unless you have a bank that absorbs that, when you get your bill for $ for a purchase in €, the exchange rate they use will have the 1% factored in. They don't tell you about that.

For years, the "network also paid in Euro and charged in US$ for the same 1%. They called it a foreign currency exchange fee. Some large banks with foreign currency operations thought they were smart and started paying the network in Euro and claimed that they didn't have to pay the 1% since they weren't exchanging currency. So, the network now calls it a "cross border transaction fee" and still charges 1%. If the paying bank wants to pay in US$ there is no additional charge for the exchange, but these big banks are paying in Euro, passing the 1% network charge on to you, then charging an additional 2% of there own for currency exchange. Basically, they are charging you 2% for what you could have gotten for free.

At one point they were hiding this in the statement, but because of a lawsuit, I believe against Bank of America or Wells Fargo, in California, they now have to admit to their greed.

It should be noted that some large banks are now doing the same thing with ATM withdrawals. Two that I know of are US Bank and Chase. I am sure more will follow.

So far, anyway, a way around this is to use Credit Unions and small local banks that don't deal in foreign currency. They just pay the network in US$ at 1% over the exchange rate.

Another option, if you don't want to change banks, is to take cash. If your bank is charging 1% + 2% + a fee for ATM withdrawals, that can amount to 3 1/2 to 4 percent. Last I checked, Wells Fargo was selling Euro at selected banks for 5% over the exchange rate. That is $10-15 more per $1000, and you don't have to look for an ATM. More importantly, you avoid a significant risk of theft that occurs in or at ATMs.
Larryincolorado is offline  
Mar 31st, 2006, 09:27 AM
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Just a question - how do we know that Schwab doesn't use a less advantageous exchange rate to end up charging us the same amount in the end?
bobludlow is offline  
Mar 31st, 2006, 09:36 AM
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Being somewhat cynical, if I were a bank, I would advertise 'no currency conversion fee'...'0%'...'never pay a cent', and then just change the exchange rate I charge to add back in the 3/1.5/1% fee. It's similar to the currency exchange booths that advertise no fees, yup, no fees, but that doesn't mean you're not paying for the service. So when you start comparing the 3% vs 0%, make sure to look at ALL of the costs, sometimes 3% may be smaller than 0%. That being said, my gut feel is that the rate I get using my ATM card is better than at any foreign exchange/bank in Europe.
Michel_Paris is offline  
Mar 31st, 2006, 09:38 AM
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That's a very interesting question, bobludlow. Several years ago when I knew that my credit card charged 1%, we were traveling with friends, one of whom was a banker and she proudly kept mentioning that her bank didn't charge anything. After we returned and compared notes (we were settling up who owed what) we even found where we had split a bill two ways. Her half ended up being 2% higher than mine in dollars. All her charges seemed to be made at 2% higher rate than mine -- even knowing that mine already including a 1% markup. Her bank still confirmed that there was no fee or charge for foreign charges, but they clearly used a different basis for the exchange rate.

 
Mar 31st, 2006, 09:44 AM
  #15  
 
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Nobody makes money by giving it away, especially banks and certainly not Charles Schwab!!!!

I wonder if he's an "Italian to the core"????
Intrepid1 is offline  
Mar 31st, 2006, 09:48 AM
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But Degas will feel better not seeing the 3% on the statement!
grantop is offline  
Mar 31st, 2006, 10:02 AM
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bobludlow: http://www.xe.com/ccc
Robespierre is offline  
Mar 31st, 2006, 10:19 AM
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Neat website Robespierre, thanks!
grantop is offline  
Mar 31st, 2006, 10:21 AM
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My credit card company began to charge the fee and said it was because someone had sued VISA and they now had to show the charges.

My local newspaper recently had an article in the travel section of the Sunday paper saying that Capitol One does not charge the fee. I called, and C.O. assured me that this is true. I have gotten a card from them; it will be interesting to see what the charges are after my upcoming trip to Paris.
carolyn is offline  
Mar 31st, 2006, 10:24 AM
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I read this article a couple of months ago. I hope the info is still accurate. It tells the rates for CC's and DC's. Of course, this info is worthless if they are hiding their fees somewhere else.

http://www.smartertravel.com/advice/...2&u=3F73102D67
sundowner is offline  

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