Do all CC's Charge for Foreign Transactions?

[p0mpey]

We have made many trips abroad and spent many $$ paying with our credit card because we were under the impression that this was the way to get the best exchange rate. However DH has just returned from a business trip to India and used our MBNA card. First time we have used this particular card overseas. On every transaction we were charged a 'foreign transation fee". I know we have never paid this before. Is it new? Do other cards charge it or was it something that was hidden in the exchange rate they used before and we just didn't know about it? Anyone know? We have a cruise next month and a trip to England in November so if it is only certain cards we need to make a quick change.

Thanks. Pat.

[LuvMyVette]

Hi Pat:

 

If you have a Visa or MasterCard and use it outside of the US, you'll be charged a three percent currency conversion fee, back to US dollars. We noticed this for the first time on our cruise in July. DH contacted MBNA and that's what they informed him. For now on we are paying cash and no large purchases. I'm not sure about Discover, AMEX or other credit cards so you would have to check into that.

This always existed but many of us didn't know about it since it wasn't posted on the credit card bill as a separate charge. At that time it was only a one percent charge and automatically added to your purchases.

[negc]

I read an article today Budget Travel which mentioned that, at this time, only Capitol One does not assess a foreign transaction fee. We just returned from Europe and both our American Express and MBNA Visa card bills (which beat us home, by the way :( ) had these fees (abt 3%). Even with the fee we probably still got a better exchange rate than if we had changed our currency on site. Unless they choose to make the lack of a transaction fee a major selling point in promoting their card, I suspect that it won't be long before Capitol One joins the rest of the cc companies.

[RachelD]

Yeah, we have MBNA also and they tacked on the Foreign transaction fee also. We did not know ahead of time.

[MarciaL]

You have to read the fine print in the little flyers that come with your bills. We had this information in all of our credit card bills several months ago.

 

I will still use the credit cards overseas, as usually the exchange rate is still better and you have protection on your purchases. I would never pay cash for a purchase overseas. If anything is wrong with the item, you have no recourse to fall back on. You can't even prove you paid for it.

 

This is just my opinion.....

[jeffdi89]

I am a former employee of MasterCard and can tell you that MasterCard and Visa have always charged the issuing institutions a currency conversion fee when their cards were used outside of the U.S. Formerly, most institutions treated this as a cost of business and did not pass these cost on to the end consumers. Now, the trend is to pass these costs on. This is disclosed on the disclosure section of the credit application. Unfortunately, this is just one instance of belt-tightening by the credit card issuers. Always be sure to read your credit terms disclosures and understand your terms. Some issuers (usually on reward type cards) have even begun to charge interest from the day of purchase instead of allowing the traditional 20 -30 day grace period. That means even if you pay your entire balance each month, you will incur interest charges. Shop around when selecting your cards because each issuer will offer different terms and charges. Mastercard and Visa deal directly with the card issuing institution. It is these institutions who can determine which and how much of MasterCard's and Visa's fees to pass on.

[p0mpey]

Jeffdi89. Do you know whether the same 3% is added on if you use a Visa Debit card.? I am thinking it would be but DH used our debit card twice whilst in India and it didn't itemize it as being added on. I guess they could have just included it in with the exchange rate and DH cannot remember what he spent in rupees for us to be able to do the math.

[Merion_Mom]

p0mpey:

 

I just incurred these transaction fees for the first time this past June, so it's "new" on my VISA. (citicard) I too found that even with the fee, the exchange rate was still favorable.

 

I got cash out of an ATM and even with a fee it was the BEST exchange rate I got the entire trip: better than the credit card, way better than exchanging money at the bank.

 

This was in Italy.

 

Carol

 

P.S. Love your member name! Ave atque vale!

[NYDee]

Our CC company told me that they had always charged the fee but until recently it had been included in the amount of purchase rather than listed separately.

[kyriecat]

I'm leaving Friday for a Med trip. I called all my CC's yesterday to let them know where and when I will be gone so I won't have any problems. When I called AmEx, the man I spoke with told me that there is a 2% exchange fee. He said several people are surprised by it and wanted to make sure I was aware of it ahead of time. I thought that was a nice of him since he brought it up without my asking. My RCCL Visa (MBNA) did not tell me about the exchange fee, but their brochure does say 3%. Discover said they do not charge an exchange fee, but they are not accepted in Europe (US, Canada, Mexico, and some Caribbean islands only). That card is staying home this trip.

[stillfrantic]

I used my Chase issued Visa in Mexico last month and WAS NOT charged a fee. I expected a fee and was pleasantly surprised to no have an extra charge.

[nosnobunny]

All of my credit cards are Canadian issued. And since I have a daughter living in S Florida, I travel to the States fairly often. I have yet to be charged a foreign transaction fee. The first time they do, I will contact the company and ask that it be removed. If they refuse, they'll be getting their card back - in many tiny pieces. It is possible however that they are hiding the charge in an inflated rate of exchange.

 

One problem I have encountered but only in S Florida is at the gas pumps where you swipe your CC before you gas up. Some require you to enter your zip code. That doesn't work for foreign cards. Our postal codes are a combination of alpha and numeric symbols. And using 99999 doesn't work either. It's not a huge problem, just iritating and a nuisance.

Beth

[Ocean Boy]

I was never charged these fees until my last trip to the Caribbean in April. It did come as a surprise to me as I did not catch the change in the disclosure statements.

 

They sometimes refer to it as a foreign currancy exchange fee but that is NOT what it is. It is a foreign country transaction fee. I argued the point with my CC company as what I bought in St. Maarten was quoted, and paid for, in US dollars. There was no "exchange rate" involved. You will get hit with the same thing in Bermuda and there is no exchange there either. The Bermuda dollar is tied to the US dollar at a 1:1 value.

 

I am quite sure I could have had a better price on the island if I had paid cash as the merchant would not have had to pay his percentage that the CC companies charge and then I would not have been hit with this new fee.

 

Anyway, they got me once but they won't get me again.

[nosnobunny]

I was never charged these fees until my last trip to the Caribbean in April. It did come as a surprise to me as I did not catch the change in the disclosure statements.

 

They sometimes refer to it as a foreign currancy exchange fee but that is NOT what it is. It is a foreign country transaction fee. I argued the point with my CC company as what I bought in St. Maarten was quoted, and paid for, in US dollars. There was no "exchange rate" involved. You will get hit with the same thing in Bermuda and there is no exchange there either. The Bermuda dollar is tied to the US dollar at a 1:1 value.

 

I am quite sure I could have had a better price on the island if I had paid cash as the merchant would not have had to pay his percentage that the CC companies charge and then I would not have been hit with this new fee.

 

Anyway, they got me once but they won't get me again.

 

I haven't had this happen in the Caribbean yet but there's always a first time. And I can say with certainty - it will be the last one they charge me. It's time we all stood up to these companies. :mad: I don't need their card, it's merely a convenience for me.

Beth

[Ocean Boy]

I haven't had this happen in the Caribbean yet but there's always a first time. And I can say with certainty - it will be the last one they charge me. It's time we all stood up to these companies. :mad: I don't need their card, it's merely a convenience for me.

Beth

I told the CC company that I would not use their card again, even for domestic charges, until I was sure that the money that they loose on not collecting their percentage from the merchants that I buy from more that offsets what they gained from charging me this transaction fee. I could tell that the idiot on the other end of the line could have cared less. :rolleyes:

[nosnobunny]

He may care more when his job disappears due to the loss of customers. There are other CC companies out there that want the business.

 

Beth

[KenCruiser]

Hi All, The relatively new charge for foreign transactions is, I believe, a result of a class-action suit many months (years?) ago filed against AMEX. If you charged any items overseas between certain dates, you were entitled to a refund of these charges, since they were not disclosed to the cardholders. These charges are now disclosed by many of the card issuers. I was lucky enough to have used a few AMEX cards overseas during the times specified. I received refunds of approximately 28 to 34 cents per card, or somewhere in that range, can't recall precisely, since the amounts were so staggering. For what it's worth, the lawyers got millions!!!:D