Avoid 2% rip-off fee on foreign transactions by using an MBNA credit card
Written: Aug 08 '05 (Updated Aug 08 '05)
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Pros: Many MBNA cards charge only 1% fee on foreign transactions vs 3% by most cards.
Cons: The usual: high fees, changing interest rates and credit limit.
The Bottom Line: To avoid the extra fees of as much as 4% charged by most credit cards on foreign transactions, choose an MBNA card that charges only the minimal 1%.
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| jsquarejj's Full Review: MBNA |
Rather than reviewing the usual stuff like interest rates, customer service, etc. I'd like to make the case for a special reason you might want one of MBNA’s credit cards.
My US Bank REI Visa Gold Card is my main credit card. I use it for all my normal credit card transactions because it has no annual fee, pays 1% cash back on all purchases, and guarantees a full patronage refund for purchases at REI, the outdoor goods retailer and one of my favorite stores. Nevertheless, I always have one of MBNA’s Visa cards, even though they’re not very highly rated by many ePinions reviewers. Here's why:
Foreign Travel
I travel quite a bit outside the USA. If you do too, consider this:
Whenever the holder of a USA-based Visa or MasterCard makes a purchase in another country, the credit card association translates the charge into US dollars, and charges you a fee of 1% of the dollar amount. Seems reasonable, since they have to do currency exchange, an inherently risky business. But here's the "screw the consumer part." Most card issuers (Citigroup, Bank of America, etc.) then tack on an additional 1% to 3% (most commonly 2%) of the dollar amount just because they can get away with it; they don't actually do anything to earn that 2% add-on.
My REI Visa Card charges a total of 3% (the 1% Visa association charge plus the 2% "ignorant sucker" charge). That's why I don't use it for foreign transactions.
So here's the good part: many--if not all--MBNA credit cards do not charge an additional fee for foreign purchases. You still pay the 1% Visa association surcharge, but that's it. On a recent trip to Europe, where I charged about $2,500 on my MBNA card, I saved $50 in fees, enough for a modest meal with wine or a small gift or two.
For the details of how most credit card issuers rip you off when you make foreign purchases, see my epinion Card issuers hide their dirty billing secret: GREED .
Other Pros
MBNA’s cards have perqs similar to other credit cards of comparable “level” (ordinary, gold, platinum), including travel insurance and emergency services, fraud protection, purchase protection, etc. Interest rates and offers are comparable to other cards, as well, (since I pay my bill every month, I don't really care about rates). I refuse to pay an annual fee, and many of their cards come without one.
Customer service has been excellent. The two times I've called, the phone was answered immediately by a person who handled my inquiry competently. MBNA also has toll free customer service numbers in the most visited countries of Western Europe. Customer service seems very concerned about keeping customers happy. With polite persistence, you can almost always get them to drop a late fee or lower your interest rate, provided that you normally pay on time.
MBNA says it will make credit line increase decisions in 15 minutes, and it will also change your monthly billing date for your convenience. Their web site provides convenient access to your account; it's easy to use, but not very fast.
Cons
The usual. MBNA, like everyone else, charges outrageous fees for late payments, over limit, returned check, etc.
MBNA regularly reevaluates your credit limit and automatically raises it if warranted, but in an increasingly common practice, they also check your global use of credit and may actually lower your limit if they think you are using too much credit overall.
Once you get an MBNA card, you will start getting tons of email and snail mail offers from MBNA and other organizations that have access to its mailing lists.
Caution!
As with any credit card issuer, MBNA may change its terms and conditions at any time after giving proper notice to card holders. Therefore, you should check the latest terms on any credit card--including this one--before you apply and before you use it for a particular purpose. Check carefully to make sure that the MBNA card you get actually handles foreign transactions without charging the additional fee that I described above.
Furthermore, MBNA offers a wide variety of credit cards, including various "affinity" cards. Each distinct card has its own terms, which may be different than the ones discussed here.
Recent Experience
I spent two weeks in Italy in June 2004, and I used my MBNA Quantum Visa card extensively, paying for hotels, train tickets, restaurant meals and a rental car. With the subsequent MBNA statement and daily exchange rate information available on www.x-rates.com , I was able to verify that MBNA consistently charged just 1% above the competitive exchange rate, exactly as advertised.
Related Links
For every day use at home in the USA, this no-fee credit card pays 1% cash back on all purchases: REI Visa card.
For the details of how most credit card issuers rip you off when you make foreign purchases, click Card issuers hide their dirty billing secret: GREED .
Recommended:
Yes
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Epinions.com ID:
jsquarejj
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 - Top 200 |
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Member: Jim J
Location: Santa Cruz, California
Reviews written: 190
Trusted by: 78 members
About Me:
#7 in Personal Finance, #14 in Travel. My goal? Saving you money.
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