Foreign Transaction Fee (revisited)

[mike35]

Several months ago, there were numerous instances of outrage regarding a "foreign transaction fee" that appeared on credit card statements, added to the payment for an Oceania cruise. I just received my MBNA statement, and lo and behold it had a $220.73 "foreign transaction fee" added to my $7357.98 cruise charge (3% of the total). I've asked my TA to attempt to reverse this onerous fee with Oceania. We cruise on several lines, always pay with the same MBNA card, and this is the first time that I have experienced a "foreign transaction fee", so it appears to be Oceania-specific.

 

Any feedback from others who have successfully reversed this fee would be sincerely appreciated.

 

Mike

[mike35]

I just got off the phone with MBNA, and they confirmed that Oceania processed my payment through a foreign terminal; hence the foreign transaction fee. MBNA was gracious enough to reverse the $220.73, but Oceania needs to figure a way to process its credit card payments through a U.S. bank to avoid these charges in the future!

 

Mike

[Mike2131]

I just got off the phone with MBNA, and they confirmed that Oceania processed my payment through a foreign terminal; hence the foreign transaction fee. MBNA was gracious enough to reverse the $220.73, but Oceania needs to figure a way to process its credit card payments through a U.S. bank to avoid these charges in the future!

 

Mike

 

I had the issue on a deposit and succeeded in getting it reversed only because I quickly cancelled the original deposit on my Chase card and replaced it with one on AX. With the original charge cancelled (I had disputed the entre charge since the amount was incorrect), Chase processed a refund for the FTC.

Final payment on our February cruise is coming up and I have to remember to make sure I avoid that Chase card!

 

Oceania, please correct this problem or you will probably lose business!

[Druke I]

I used my Citibank to pay final payment for last cruise, 8-30-05, Regatta, Baltic, and same card for deposit, Nautica, 11-27-06, and both went through without the 3% foreign transaction fee.

 

Guess I used the "right" card.

[mike35]

Hi Michael

I guess the point here is that there shouldn't be a "right card" or "wrong card". Apparently some cards charge the fee if the charge is processed through a foreign bank. With this in mind, Oceania should get on board with all of the rest of the cruise lines and eliminate this gross irritant (agree??).

 

Mike

[Rickey 88]

Hi Michael

I guess the point here is that there shouldn't be a "right card" or "wrong card". Apparently some cards charge the fee if the charge is processed through a foreign bank. With this in mind, Oceania should get on board with all of the rest of the cruise lines and eliminate this gross irritant (agree??).

 

To Mike and all others:

 

This whole subject has been extensively covered in this and other groups before. Some have the impression this is an Oceania charge and therefore something Oceania has to correct. This is simply not the case.

Actually, the 3% transaction fee is one which is only levied by the issuing banks, and is kept by them. Oceania or any other merchant does NOT receive any benefit.

If you would read your Terms and Conditions agreement with your issuing banks, you will see what their policy is regarding "foreign" transactions. Most banks, including Amex, treat a "foreign" transaction as actually that - a transaction (i.e. "Sale") made in a foreign currency which must be converted into U.S. dollars. A "Conversion" fee applies to each of these credit card transactions.

However, a few banks - mostly Chase, JP Morgan, Bank One and perhaps a few others - word their agreements differently. The following is a direct copy from the Chase agreement:

"International Transactions: 3% of the U.S. dollar amount of the transaction, whether originally made in U.S. dollars or converted from a foreign currency."

For a reason that can only be known to them, Chase has considered Oceania to be a "foreign" merchant and thus will apply their 3% fee to any "O" transaction, whether a deposit or final payment made to Miami, or an onboard charge made at sea.

There is not much that Oceania can do about this policy and it really doesn't have anything to do with who Oceania uses as a processing bank - those of you who suggest Oceania change its banking relationship are asking far too much and may not realize how difficult and expensive a proposition this may be. However, the answer to the problem of this fee, for those few who have been charged the 3% is really quite simply:

DO NOT USE ANY CARD WHOSE ISSUING BANK USES TERMS SUCH AS ABOVE!!

Have the charge reversed - and then recharged using a different card (being sure first what conversion terms are in effect by the second bank).

Sorry to be so long-winded, but this comes from my past 30 years in the credit industry. Thank God I'm now retired.....

[mike35]

Thanks for the in-depth analysis of this problem, Rickey. I count on points accumulated on one particular card to get flight upgrades and other perks, and I have never experienced a foreign transaction fee when using this card for a U.S. based firm. It seems rather unfair that of all the cruise lines we've sailed on (see below), only Oceania seems to have this problem. I can certainly appreciate a cruise line based in a foreign country (like Peter Deilmann, which we recently sailed on) using a "foreign" bank; hence I would not question the foreign transaction fee in a case like that. But to have a Miami-based company use a financial institution that allows some credit card companies reap (or is it rape) 3% seems grossly unfair to Oceania's customers. Who's to say that credit card company "A", that doesn't tack on a charge today won't decide to do so at a moment's notice? Enough rambling, I guess, but I hope at some point in time Oceania elects to join the rest of the cruise lines' methods of charging to credit cards without having to worry about the addition of a "surprise" charge.

 

Mike

[esther e]

Hi Michael

I guess the point here is that there shouldn't be a "right card" or "wrong card". Apparently some cards charge the fee if the charge is processed through a foreign bank. With this in mind, Oceania should get on board with all of the rest of the cruise lines and eliminate this gross irritant (agree??).

 

Mike

 

 

AGREE!!!!

[phlewt]

To Mike and all others:

This whole subject has been extensively covered in this and other groups before. Some have the impression this is an Oceania charge and therefore something Oceania has to correct. This is simply not the case.

 

I disagree. According to numerous posts, Oceania is using a bank in Ireland to process their credit card transactions. So Oceania could correct the problem by using a bank in the USA.

 

 

 

For a reason that can only be known to them, Chase has considered Oceania to be a "foreign" merchant and thus will apply their 3% fee to any "O" transaction, whether a deposit or final payment made to Miami, or an onboard charge made at sea.

 

...

 

I don't see it being such a mystery. Some banks are routinely looking at a transaction processed in Ireland as a foreign transaction. With your extensive background in the credit industry, wouldn't you agree that this entire situation would be fixed if Oceania were to use a bank in the USA?

[lcand1923]

I'm being stubborn about this, but I personally feel that the problem is Oceania's.

 

If you look at the other string dealing with 3% Foreign Transaction Fees, you will see several people who used Chase Cards to make deposits or final payments and who did not incur the fee.

 

Mike did not mention that he had a fee on his deposit, just on his final payment. Based upon his post, he always uses the same card.

 

When I contacted AMEX about using their card, they told me that they also charge a 3% foreign transaction fee, so I find it interesting that MIKE2131 managed to get his final payment processed without a fee on AMEX after he had the fee incurred when using his Chase card..

 

In other words, I don' think you need to find the right card. You need to find the right person to process the charge in Oceania's office.

[lcand1923]

We just got our Chase Visa Statement which contains the final payment for our South American Cruise. We were not charged any foreign transaction fee.

[stomsf]

So it sounds as if Chase used to charge the fee but isn't anymore, Citibank isn't charging the fee, and Bank One and JP Morgan are -- is that correct?

[phlewt]

Visa and Mastercard are charging 1% on all "foreign transactions". The card issuers (e.g., Citibank, Chase, etc.) are mostly adding a charge of 2% on "foreign transactions". So if you purchase something outside of the USA using your Visa or Mastercard, you will probably see a 3% assessment added to the total.

 

It has been reported that Oceania has used a bank in Ireland to process their charge card payments. Some credit card issuers have therefore treated these as "foreign transactions".

 

There don't seem to be very many recent instances of this fee being assessed on payments to Oceania, so I wonder if Oceania might have taken some action to remedy the problem.