What's up with this 3% BS!

Mar 31st, 2006, 10:32 PM
  #41  
Neopolitan
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grantop I'm curious what one thing has to do with the other. What does a person's choice of mode of transportation have to do with paying unnecessary charges on a totally unrelated matter.

Are you also suggesting if a person chooses to drive a Mercedes rather than a Honda he shouldn't worry about the gas station on one side of the street charging 2 cents a gallon less than the one on the other side of the street?

I really don't get your point. Different people have different styles of comfort -- but that doesn't mean he can't exercise some frugality in other areas.
 
Mar 31st, 2006, 10:57 PM
  #42  
 
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<Nobody makes money by giving it away, especially banks and certainly not Charles Schwab!!!!>

Which is why we use credit unions. Credit Unions are there for the benefit of their members.

Our two Visas were both from credit unions and charged no conversion fees with great exchange rates for our purchases.

5alive is offline  
Mar 31st, 2006, 11:01 PM
  #43  
 
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Hi degas, I suspected that you might possibly have a USAA credit card! I do too and although I don't use it much in the states as I use another card for those darn FF miles I intend to use the USAA card in Italy.

In fact, I think I will use all my credit cards on the same day..just out of curiosity to see how the charges compare. That would be interesting.

Degas, it seems to me travelling has gotten so much more complicated these last years. And one never does "everything" perfect while on a trip. But a question..did you have a good trip? That is the most important. Take good care.
LoveItaly is offline  
Apr 1st, 2006, 04:45 AM
  #44  
 
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Neo, your little analogies aside, I'll try to explain my post to you: someone agonizes over being assessed 1%-3% of a credit card purchase making it out to be a huge financial loss for them, but they think nothing of spending money in other areas that they could save on if cost cutting was something they had to be vigilant about, which would seem to be the case considering how many carry on about the 1% and 2%. It has nothing to do with critiquing how someone else travels. Stop reading into every thread - you just end up confused, not getting it, and "stumped".

LoveItaly is so right - the bottom line is "did you enjoy the trip"?
grantop is offline  
Apr 1st, 2006, 05:08 AM
  #45  
 
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Grantop

I think people may seem to be obsessing about this because, unlike that trip to the airport in a cab, they are having a difficult time getting information as to what their actual costs will be before the buying decision has to be made.

The situation with various financial alternatives is such that the providers mask the true costs and/or bury them in fine print or legalese.

If they had a clear and definitive statement concerning each alternative payment method and the costs involved they wouldn't be spending so much time trying to figure out that information.





Rillifane is offline  
Apr 1st, 2006, 05:26 AM
  #46  
 
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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'????"

Schwab does, indeed give away money, as does any card issuer who credits airline miles or cash back discounts or any other incentive to make their offering more attractive to customers.

They also give us tickets to Broadway road shows, free gourmet dinners, and passes to the FBR Open in Scottsdale. And they write it all off to marketing expense, meaning they pay no tax on it.

You must be thinking of Charles Ponzi.
Robespierre is offline  
Apr 1st, 2006, 06:09 AM
  #47  
 
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"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!"

I agree. With current technology, therse transactions are viirtually seemless and there is no excuse at all for charges of this type. The card issuer already gets 4% from the merchant, so that are making 7% on every transaction. It's completely outrageous.
lmhornet is offline  
Apr 1st, 2006, 06:09 AM
  #48  
 
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Rillifane, that makes sense!
grantop is offline  
Apr 1st, 2006, 06:40 AM
  #49  
 
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I have three cards: MBNA, United Mileage Plus, and a State Farm (the insurance company) VISA. I have pre-booked some hotels in France this summer and noticed the 3% on my mileage plus card. MBNA says expect the 3% charge w/ them. I haven't used the State Farm card at all, but I did call and found out that SF is charging the 1% charge. We'll see this summer!
Janeyre is offline  
Apr 1st, 2006, 07:01 AM
  #50  
 
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I know it's much more fun to rant and rave on a message board but if you take the time to read the cardmember agreement you get with EVERY credit card you will find that EVERY Visa and EVERY Mastercard starts with the same currency conversion because MasterCard Intl and Visa International set it. If you go to their websites they spell it out.

The individual banks can choose to not charge the 1% that Visa and Mastercard impose. They can also add an additional 2% if they choose. This is clearly spelled out in the cardmember agreement.

Is this so difficult to understand?

BTW, credit unions have an advantage over banks - they pay no income taxes.

jsmith is offline  
Apr 1st, 2006, 07:09 AM
  #51  
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And if we want to clear up some myths, I see above where it was stated that the credit card companies make 4% from the merchants on every single purchase. That is simply not true. A merchant's charges are set according to an agreement with Visa of Master Card or his bank servicing those accounts. As a merchant myself, my annual rate was set at 1.5%. Often the rate changes weekly or monthly according to gross sales on the card for some merchants on other types of agreements.
 
Apr 1st, 2006, 07:18 AM
  #52  
 
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The discount points charged by the card processor depends on where the merchant's sales fall on a grid of average ticket size vs. monthly volume. It can be as little as 1% or as much as 5%. Independent Service Organizations charge a little more than banks and travel providers.

If you think about it, spending $60-70 on a taxi and quibbling about a couple of points on card charges is representative of a practice so common that it has a name:

Penny-wise and pound-foolish.
Robespierre is offline  
Apr 1st, 2006, 07:19 AM
  #53  
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I find it very sneaky when the advertising hype/come on is so bold and bright and the obscene charges are hidden darkly away amid four pages of tiny print. Sure, it is legal. Sure, the consumer should read all four pages. But the banks know most will not do it.
degas is offline  
Apr 1st, 2006, 07:30 AM
  #54  
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Robes, you make good points, but look at it this way: if you avoid those charges then you can "better afford" to treat yourself to more cab rides, expensive foo-foo coffees, ...... .
degas is offline  
Apr 1st, 2006, 07:39 AM
  #55  
 
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Personally, I don't find cab rides all that luxurious compared to trains. When I splurge, I do it on things that last longer than a half-hour - like not being crammed in a coach seat for 22 hours.
Robespierre is offline  
Apr 1st, 2006, 08:41 AM
  #56  
 
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In early March I bought plane tickets for a trip to Greece and after reading this thread, got curious about the different rates between cards. Using the xe website provided above, I checked 3 different cards.

Capital One: the raw exchange rate was 1.20, with a negative fee; the rate exchange on my statement was 1.19. I know there's a 1% fee so it must be in the raw rate, but the calculator says it excludes bank fees.

Debit Card, Wainwright Bank, Boston: 1.2 raw exchange, with a negative fee; exchange rate on statement is 1.2. I know there's a 1% fee.

Debit Card, Bank of America: raw rate and statement rate were both 1.19. But, they added 3% of the USD amount as a fee. Never read the small print on my debit card. Once I saw that on my statement I switched cards.

Realize its all small potatoes. But, last summer, using the MBNA credit card in place of CDW, we had a car accident in Ireland. Their 3% fee got added to the 2000 euro that I got charged on my card. Even tho they ended up paying for the damage, I could have purchased the CDW for less than the 3% fee. I no longer use that card.


Jackie is offline  
Apr 1st, 2006, 08:59 AM
  #57  
 
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My USAA Plat M/C gives me 1.25% cash back at the end of the year if I have charged a minimum of $10,000 over the year, which is not difficult. They give you 1% if you charged under that amount over the year. Makes the 1% M/C charge a "wash."
Budman is offline  
Apr 1st, 2006, 09:04 AM
  #58  
 
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Oh, and another thing -- besides the 3% or whatever charges your CC company adds to your transactions, imagine if you get additionally screwed when some merchant uses the DCC on you. I don't think 3% or 6% is chump change. Just think of all the extra beers you could have had.
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Apr 1st, 2006, 09:05 AM
  #59  
Neopolitan
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That's interesting about the charge on the accident, Jackie. When we had an accident in Wales, eventually they added 6000 dollars (after being converted from pounds) on our Visa card for the wrecked car. But when they paid us a check to reimburse us, it included the final dollar amount -- after the 3% addition Citibank does. When I submitted our final claim, I included that fee, so maybe that's why they paid it. So it paid the "fee" as well. Meanwhile, did you just say you could have purchased the CDW for $60? And if you had purchased the CDW wouldn't you still have had a ductible? In our case the deductible and the cost of purchasing the CDW from the agency would have totaled around $1000 more than using our card.
 
Apr 1st, 2006, 10:20 AM
  #60  
 
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Neopolitan,

As I remember the numbers...my credit card was charged $1942. There was an additional $50 something conversion fee on a separate line added to that. I received a check for $1942, exactly the amount appearing on my statement. I believe the rental car was $230ish for 4 cays. The CDW with no deductable was around 11 euros/day.
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