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While you were sleeping CITI Jumped 50%!!! (Reply to this comment)
by rpmcestmoi
The subject card, Citi AAdvantage, just went to 3% on foreign purchases.
As for REI, if you want to pay uptown prices for China made goods, fine with me. I won't.
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Apr 28 '08
3:33 pm PDT
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While you were sleeping CITI Jumped 50%!!! (Reply to this comment)
by rpmcestmoi
The subject card, Citi AAdvantage, just went to 3% on foreign purchases.
As for REI, if you want to pay uptown prices for China made goods, fine with me. I won't.
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Apr 28 '08
3:33 pm PDT
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3% and less expensive? (Reply to this comment)
by valleyman
There was a recent ruling (supreme court?) that requires card issuers to separate fees from transactions made in foreign currency in the statement. So consumers no longer have to lookup (old) New York Times to discover the fees. Banks can no longer hide behind an aggregated "rate".
I'm very surprised to read that even with the 3% fees it is less costly to charge credit cards than exchanging cash/traveller's cheque at local bureaus. In my experience, buying and selling rates (both including fees) posted in most foreign exchange outlets differ less than 3%. (The difference varies from sub-1% to 1.5%.) Even though some offices charge an additional fee for small transactions, many don't. This means that these local bureaus charge much less than 3%.
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Aug 08 '05
1:19 am PDT
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Re: Generalization and Buried Treasure (Reply to this comment)
by jsquarejj
Thanks for the clarification.
As I stated in the opinion, people need to read the fine print of their card agreement in order to determine the charges applied to foreign transactions
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Aug 04 '01
9:35 am PDT
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Generalization and Buried Treasure (Reply to this comment)
by savonarola
Other big issuers that charge 2 percent in addition to the 1 percent association fee are Citibank, Bank One/First USA, Chase Manhattan, Providian, and Wells Fargo.
Capital One, MBNA America, FleetBoston, and Wachovia Bank are not charging extra fees on foreign transactions at this time. Furthermore, most credit unions and community banks don't charge these extra fees either.
Overall a nice writeup on an abusive practice.
One point of clarification, however, is that you can't determine whether or not you're going to incur the foreign exchange markup by comparing your card with a list of issuing banks. Particularly in the cases of banks which service "affinity" credit cards, the imposition of the additional markup is the subject of negotiation between the bank and the affinity group who's name goes onto the card during the preparation or renewal of a service contract.
As a case in point I hold two credit cards serviced by FirstUSA (Bank One), a generic Visa associated with United Airline's Mileage Plus program, and a Platinum Mastercard associated with the California State Automobile Association (the Northern California AAA affiliate). Possibly in exchange for the harsh $65/year fee for the United Airline card, there's no markup beyond the 1% Visa International network fee, something I recheck before I travel, and verify after trips by comparing the exchange rates I get for charges against the appropriate daily interbank rates. In contrast, the no-fee CSAA card imposes a 2% fee on top of the 1% network fee.
Bank of America charges a 2 percent fee on all ATM, debit, and credit card transactions abroad (in addition to the 1 percent association fee). It also charges $1.50 to $2.50 every time you use an ATM abroad.
There's an important gem imbedded in the above. The foreign exchange markup on credit card transactions has actually been going on for several years now ( I'm actually a bit surprised to see how many people seem to be unaware of it). A far more recent development is banks charging similar markups on ATM cards used outside of the US. Its long been recognized that by using your ATM card to obtain local currency (from an ATM) while outside of the US you get a far better exchange rate than if you go to a bank or exchange booth (using the front desk of a hotel is even worse). Recently, some but not all banks have started tacking the same 1-3% on top of the network (1%) fee, and many have also boosted the per-transaction ATM fee over domestic rates.
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Aug 03 '01
11:33 pm PDT
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Thanks for the info. (Reply to this comment)
by jsquarejj
If the whole world had access to USAA's products and services, we'd all be better off!
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May 16 '01
8:06 pm PDT
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An addition to your list of the good guys.... (Reply to this comment)
by Zski
USAA (a major card issuer - they have a seat on the MasterCard board of directors) doesn't charge the extra fee.
Since Bank of America Military Bank has to compete with USAA, they don't either. I'm not surprised that the "regular" Bank of America does, though.
People with MasterCard & Visa check cards will also want to check their disclosure statement.
Thanks for the great review!
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May 16 '01
9:50 am PDT
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You've definitely hit on one of the reasons (Reply to this comment)
by jsquarejj
so few people complain. Even with the "nuisance" charges, paying with a credit card usually gives you a better deal than exchanging cash or traveler's cheques.
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May 09 '01
9:21 am PDT
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Great review! (Reply to this comment)
by pipet
I have to say that I have pretty much only paid attn to what my final price was for any foreign transaction, and the charge is usually less than I would have paid had I exchanged my money for cash (unless the exchange rates happened to move unfavorably by the time the transaction is posted). I guess I've been one of those not complaining because I didn't realize I was getting those extra charges. I'll definitely have to check out my cards & see what their fees are. Thanks - you might just have saved me some money on my next trip abroad!
pipet
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May 08 '01
9:49 am PDT
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Thanks! (Reply to this comment)
by jsquarejj
Larger card issuers have been doing this for much more than the last year, but the last few years have seen significant fee increases. Smaller "community banks" rarely charge this fee, much the same as credit unions.
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May 03 '01
9:26 am PDT
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GREAT Advice! (Reply to this comment)
by mrkstvns
I hope everyone traveling abroad takes a minute to read your review -- this is such an incredibly sleazy thing that banks issuing Visa and MasterCards have been doing for the past year that it's amazing how few people know about it and how few complain.
In a recent issue of Arthur Frommers Budget Travel, it was pointed out that while most big U.S. banks pull this stunt on their customers, most credit unions do NOT.
Bottom line: If you travel much outside the U.S., think seriously about switching your credit card business to a credit union. It could save you far more than you save by shopping around for no-annual-fee cards!
Thanks for the thorough review!
Mark
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May 01 '01
9:39 pm PDT
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Re: thanks! (Reply to this comment)
by jsquarejj
Glad I could help!
I love London, and hope you will, too.
Mind the gap! (If you don't already know what this means, you'll find out sometime after you get there.)
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Apr 24 '01
6:40 pm PDT
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The situation with Canada may be different: (Reply to this comment)
by jsquarejj
Because of the very close ties between the US and Canada, the situation I described may not be exactly the same. It's worth looking into.
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Apr 24 '01
6:37 pm PDT
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Your review (Reply to this comment)
by adjensen
Hi, and thanks for the great information. I go up to Canada quite often, and while I haven't seen anything of this nature, I'll keep an eye on it in the future!
Thanks again.
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Apr 24 '01
6:26 pm PDT
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thanks! (Reply to this comment)
by Linds81
That was a great review.. I'm planning on studying in London in the fall, and don't want to have a lot of cash on me. I'm taking my check card with me and going to get a credit card, and now I have another feature to look for. I'm bookmarking your epinion for future use!
Thanks,
Linds81
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Apr 24 '01
6:08 pm PDT
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